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Infographic: The state of CECL with financial institutions

How CECL requirements are being approached and the related concerns

In response to the new current expected credit loss (CECL) requirements mandated for 2023, our team of Value Architects™ is helping financial institutions through the stages of implementation, modeling and validation. 

In our recent webinar series, Understanding the ins and outs of CECL models, presenters discussed several CECL model options, including best practices, shortfalls and the data requirements for each. 

Participants answered several questions about their experiences with CECL implementation thus far, meeting various requirements and the challenges that plague them the most. 

53% of webinar respondents reported still being in the planning stages of CECL. 

2-to-1 is the ratio respondents preferred performing model validation prior to implementation versus afterward. 

Model validation procedures: 

  • Model governance and compliance 
  • Data inputs 
  • Model assumptions 
  • Model methodology and testing 

Key additional findings 

  • 16% of respondents reported being in the post-implementation and validation stage. 
  • 47% stated their No. 1 challenge implementing CECL methods is meeting technology requirements. 
  • One-third said meeting data requirements was a large concern. 
  • Half of all respondents had not yet selected which CECL model to use. 

Key takeaways  

Navigating the requirements of CECL isn’t easy for most organizations, it’s complex and time-consuming. Baker Tilly advisors understand today’s regulatory hurdles and have the right methodology, technology and modeling experience to help clients go beyond simply achieving compliance by using their data to their strategic advantage. 

For more information on this topic, or to learn how Baker Tilly specialists can help, contact our team.

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