Diving Deeper

Implementing CECL Part 2: Turning CECL Compliance into a Competitive Advantage

This post is the second in a two-part series on CECL. Part 1 explains the rationale for CECL and its implications on financial allowance practices.

NOTE: This post is the second in a two-part series on CECL. Click here for Part 1, which explains the rationale for CECL and its implications on financial allowance practices. As financial institutions prepare for the 2020 and 2023 implementation of CECL guidance regulations, most institutions have the same hurdles to overcome. We view these hurdles as strategic opportunities for the institutions that put the time and energy into understanding and developing the best solutions. Institutions are required to develop forward-looking approaches based on the materiality of their portfolios. While they might be able to rely on simple approaches for...

Implementing CECL Part I: Impacts for Institutions Big and Small

Implementing CECL: How changes to modeling and accounting processes bring change to financial services.

Part 1: How changes to modeling and accounting processes bring change to financial services. The new Current Expected Credit Loss (CECL) standard could have substantial and far-reaching impacts to the bottom line for many banks, but, outside of the accounting community, many financial services leaders don’t fully understand its implications. Financial institutions that approach this new challenge as a business opportunity will find that CECL mitigates existing loan accounting headaches, giving them better insight into their portfolio. Done the right way, the strategic implementation of CECL has the potential to become not only a compliance success, but a competitive advantage....

Don’t Blame Polls: Know the Data Science to Analyze Results

Understanding polling and election modeling: How the behind data science and models that were seemingly off-target in 2016 are different in 2020.

Understanding polling and election modeling: How the behind data science and models that were seemingly off-target in 2016 are different in 2020. With less than a week until Election Day, key polls are pointing in the Democrats’ direction. Former Vice President Joe Biden leads in nearly every key battleground state, and pollsters and pundits say his victory is likely. For many Democrats, however, it feels like repeat territory, a PTSD of sorts from 2016, recalling pundits describing the race as “Hillary’s to lose” and assigning high chances to her victory. But by late Election Night, Donald Trump had claimed the...

Responsible Machine Learning: Three Rules of Thumb for World-Class Monitoring

Highly regulated industries can better leverage machine learning tools (and create trust in their findings) by developing monitoring systems that are holistic, insightful and actionable.

Summary Solution: Highly regulated industries can better leverage machine learning tools (and create trust in their findings) by developing monitoring systems that are holistic, insightful and actionable. Over the past decade, we’ve seen an explosion in the field of machine learning. Tech giants, online retailers, and social media platforms all have adopted machine learning strategies to evaluate data in ways that human beings and traditional modeling frameworks cannot. These new machine learning models provide a better fit for non-linear relationships, uncover unique insights and are better equipped to pick up on the nuances of a shifting environment. It’s no surprise,...

Data: Quality Over Quantity

Creating a culture of data quality not only has a concrete impact on the accuracy of your findings, but also inspires greater organizational buy-in when your framework adheres to certain standards.

Summary Solution: Creating a culture of data quality not only has a concrete impact on the accuracy of your findings, but also inspires greater organizational buy-in when your framework adheres to certain standards. More data is better data. It’s a common refrain in data science and other analytical circles – and it’s one that makes sense. If you have more to scrutinize, previously undiscovered insights may be lurking in unexplored places. And while accurate for the most part, the phrase lacks a mention of one key element: quality. As the tools that analyze data grow more sophisticated, the quality of...

The Process Behind Process Automation

From EUCs to structured, automated data, we walk you through the process, best practices and change management to ensure you’re leveraging analysts’ skillsets to the fullest.

Summary Solution: From EUCs to structured, automated data, we walk you through the process, best practices and change management to ensure you’re leveraging analysts’ skillsets to the fullest. Since its introduction in September 1987, Excel has been the go-to resource in an analyst’s toolkit due to its versatility and capacity to quickly translate complex formulas into illustrative tables and charts. Over the ensuing years, a typical financial services analyst would build elaborate, interwoven spreadsheets, simple models, assumptions and calculations, all in Excel, creating end-user computing (EUC) applications. And while these EUCs built the foundation for modern automation, generally speaking, they...

Building Internal Tech Products for “Non-Tech” Companies

Summary Solution: Organizations often shortcut internal tech products because they don’t provide direct value to the customer. This post explores where and how to invest your time and efforts. Read a book or article on the topic of building a great product, and the process seems simple enough: Identify a customer base with an underserved […]

Summary Solution: Organizations often shortcut internal tech products because they don’t provide direct value to the customer. This post explores where and how to invest your time and efforts. Read a book or article on the topic of building a great product, and the process seems simple enough: Identify a customer base with an underserved need, present a value proposition, slap on some consumer-driven features and iterate to success. Even when we calibrate product development for an internal audience within an organization, the formula presents itself as manageable: Build an enterprise solution that solves for real problems and stop wasting...

Leveraging Big Data for Power Analysts

In order to get accurate data into analysts’ hands, organizations should employ a combination of data lakes and data warehousing to effectively balance the need for freedom in a structured data environment.

Summary Solution: In order to get accurate data into analysts’ hands, organizations should employ a combination of data lakes and data warehousing to effectively balance the need for freedom in a structured data environment. The potential of big data is becoming undeniable. The breadth of data collected has exploded, and the tools and techniques to effectively leverage it have never been more sophisticated. From tech companies born in the cloud to fast food chains, technology-forward, data-rich organizations are winning by harnessing this power. Within the financial services industry, data streaming and machine learning are supercharging marketing and social media efforts,...

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The Process Behind Process Automation

From EUCs to structured, automated data, we walk you through the process, best practices and change management to ensure you’re leveraging analysts’ skillsets to the fullest.

Since its introduction in September 1987, Excel has been the go-to resource in an analyst’s toolkit due to its versatility and capacity to quickly translate complex formulas into illustrative tables and charts. Over the ensuing years, a typical financial services analyst would build elaborate, interwoven spreadsheets, simple models, assumptions and calculations, all in Excel, creating end-user computing (EUC) applications. And while these EUCs built the foundation for modern automation, generally speaking, they lacked traceability or documentation, making model adjustments challenging and presenting serious challenges for governance, risk and regulatory compliance functions.