Financial institutions (FIs) recognize the depth and breadth of the CECL challenge. Not only is moving from a passive annual credit-review regime to active credit reporting a cultural sea-change for most FIs, but implementing a repeatable, reliable CECL compliance program is a massive undertaking. Achieving the data transparency, validation, model implementation/integration, accounting entries and disclosures required for CECL compliance, means getting both data and technology right.
However, as FIs look across their data/technology landscapes, the pathway to achieving full, repeatable end-to-end process automation on time may not be clear. They struggle with diverse and disparate data, many models and manual processes. They want to leverage the work already done and capabilities already in place. And they want to complete their CECL programs as efficiently as possible. As they urgently contemplate next steps to CECL compliance, FIs’ many questions include:
- How do we leverage the information and model outputs we already have?
- Are our existing models producing the required outputs for CECL?
- How can we eliminate dependency on manual processes?
- Where do we stand with CECL compliance overall?
AxiomSL’s Solution Fits Your CECL Program
AxiomSL designed its CECL solution to address these questions and embrace FIs’ diverse journeys to CECL compliance. Running on its award-winning data integrity and control platform, AxiomSL’s solution delivers the modules essential to achieving trusted, repeatable CECL compliance:
- Robust integration engine
- Extendable data model
- CECL accounting and posting engine
- Disclosure reporting
- Advanced analytics dashboards
Robust Integration Engine: One of the FI’s chief concerns in orchestrating end-to-end process automation is managing its CECL data sources. A hallmark of AxiomSL’s solution is that its platform integrates any data repository without forcing any data transformation. By utilizing the platform, the FI can bring together data from diverse sources across accounting, risk and finance, and gather other essential data such as macroeconomic factors. Data validations are performed upon data ingestion. Configuring additional validation and reconciliation checks can be done at any stage of the process using the built-in visual business rules (VBR) capability.
Extendable Data Model: The flexibility designed into its modeling layer, is one of the solution’s most compelling aspects. Its single platform and modular structure for customized implementation of models enables FIs to leverage their existing models and/or utilize the platform’s embedded modules. When the FI wishes to plug in its proprietary or third-party models, the platform accommodates many formats including SAS, CRM, R, Python and SQL with ease. When the FI wishes to leverage the platform’s embedded R, Python and SQL modules, it also benefits from having direct access to the platform’s built-in auditability and data-lineage capabilities.
CECL Accounting and Posting Engine: The solution provides a robust data dictionary that captures the calculation inputs and the attributes necessary for CECL calculation and disclosure reporting, including:
- Financial asset classification
- Accounting entries
- Allowance and provision calculations
- Disclosure calculations
- Attributes needed for populating disclosure reports
- QFR and other manual adjustments capabilities
The resulting consolidated cube captures the input data, calculation results and reporting attributes in a single matrix making it easy to perform sensitivity analysis and populate regulatory and other financial reports.
Disclosure Reporting: AxiomSL’s CECL solution provides the 15 required disclosure reports of FASB’s rule 326. The entire reporting process is transparent, auditable and underpinned by a controlled framework. Users can drill-down to source data and track data-lineage throughout the process.
Analytics Dashboards: The CECL solution provides critical analytics and adjustment dashboards that enable the FI with a business-oriented view of their CECL compliance program. Its built-in detailed trend analysis capability summarizes rollforward allocation and provision and provides attributions, trends and charting. The adjustments dashboard provides the ability to implement manual adjustments to ALLL balances and includes validation, full sign-off history and the ability to attach documents relevant to the adjustment.
Complete Your CECL Preparation in Weeks Not Months
CECL will drive changes that can lead to significant improvements to a bank’s overall credit-risk insight and P&L management, yielding tangible benefits to decision-making and competitiveness highly desired by the CFO, CRO and all senior leadership. Innovative technology empowers FIs to create a robust CECL program.
AxiomSL’s CECL solution running on its ‘Platform for Change’ is designed to ingest volumes of disparate source data without transforming it and is equipped with dynamic data-lineage and tracing capabilities. The platform empowers FIs to:
- Enhance visibility into their risk and regulatory data
- Gain business insights from trusted information
- Withstand audits
- Easily adapt to regulatory changes
- Deliver the repeatable automation, auditability and analytics
AxiomSL’s subject-matter experts and professional-services team work with FIs to guide efficient implementations that enable FIs to easily incorporate their CECL data and models and leverage AxiomSL’s flexible capabilities to create an end-to-end CECL solution in weeks, not in months.
Contact our CECL subject-matter experts here.