Our structured approach to CECL relies on years of risk management experience to develop life of loan loss estimates while setting the stage to leverage information across your business
You can apply these steps to your DIY CECL process. Just be careful to make sure you have all of the data you need to prepare a range of CECL models. And by all means keep it secure!
COLLECT DATA
Detailed customer data from origination through performance (delinquency and pay down) will be used to build segmented models.
Collecting origination and demographic data on each customer allows for more granular segmentation
Eliminate the risk that customer data can be stolen by stripping off identifying information
DEPERSONALIZE
Assign unique identifiers to each customer and account to ensure client privacy.
SET DATA DICTIONARY
Document what data is being used including the range of acceptable variables.
Creating a data dictionary ensures that the information is understood consistently by all users
Pull the data needed to support CECL calculations as well as other data useful for marketing and risk insights
EXTRACT DATA
Create processes to pull each new piece of data, perform data audits, and prepare to load into database with unique identifiers.
BUILD DATA TABLES
Structure your data into a form that supports both CECL modeling as well as other analysis
Structure your data to support customer performance including risk, response and profitability
One size does not fit all; find the best model to meet your accounting and strategic information needs
BUILD MODELS
Evaluating which model works best for different products and customer types will deliver more accurate forecasts.
ADD SUPPLEMENTAL DATA
Adding in credit and demographic data can improve forecast accuracy from better segmentation. It also can be used in building targeting models and strategies.
Make acquiring 3rd party data affordable and valuable by leveraging our experience and expertise
Monitor loss estimates for accuracy and shifts in performance compared to forecast
TRACK PERFORMANCE
Monitor actual performance to forecast to identify hits and misses to improve the next.
CROWD BASED FORECAST
The economy's strength will wax and wane. Compiling a forecast from all of our clients will lead to a more accurate forecast than any one client can provide.
Generate more accurate economic forecasts by leveraging the 'wisdom of crowds' with inputs from fellow executives
Ready for Action?
Meet all your CECL and regulatory compliance requirements and start down the road to gain insights into your business, improve strategies and tactics, and boost overall profits by contacting us now.
