To effectively model for CECL, financial institutions will require more data than what has traditionally been used to calculate credit losses. Moreover, many institutions often have data that is not standardized, centralized, or reviewed for integrity. MountainView/Situs’ CECL Credit Risk Solutions includes comprehensive data remediation and optimization. We audit a financial institution’s available data and identify areas where we can extract and validate key data elements from imaged files, boosting CECL readiness. Additionally, we remediate data and implement QC practices to improve data accuracy. By focusing on improving and optimizing your data in your data warehouse, we enable financial institutions to standardize CECL modeling methodologies and leverage data for multiple purposes beyond loss estimation including Business as Usual (BAU), Asset and Liability Management (ALM), stress testing, capital planning, and more.
FASB does not prescribe the use of specific estimation methods so financial institutions are responsible for applying, testing, and identifying the most appropriate methodologies based on their unique data and business requirements. MountainView provides your institution with a customized model solution unique to your institution’s data and model governance needs including the documentation and training necessary to own and understand the model. All models are built to be compliant with industry best practices.
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While modeling for CECL presents its own set of challenges, financial institutions must also review processes to ensure that an infrastructure supports model implementation and ongoing model maintenance. Whether it is your custom build or a third party model, MountainView/Situs supports model and process implementation.
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To ensure models adhere to supervisory guidance pertaining to model risk management, MountainView/Situs provides an independent validation of CECL models. Our CECL model validation identifies limitations of a model or model framework used to forecast credit losses, balances, income, expense, capital and liquidity including custom-build, custom-configured, or third-party developed. Read more about CECL Model Validations here.