Abrigo, a provider of compliance, credit risk and lending solutions technologies for community financial institutions, has opened its annual survey to track the market’s progress, preparation and expected impact of the Financial Accounting Standards Board’s new current expected credit loss standard. The new accounting standard, which the financial services industry has heralded as “the biggest accounting change in banking history,” will go into effect on Dec. 15, 2019, for SEC-filing financial institutions.
Abrigo will poll hundreds of financial institutions to measure their progress with CECL implementation — from just beginning preparation, to testing potential CECL-compliant methodologies, to successfully adopting the standard on its financial statements. Not only does the survey help financial institutions benchmark their progress against peers, but it also highlights how peer institutions are involving various departments in their CECL work, the extent of their data collection and the specific methodology or methodologies institutions are planning to use.
Last year’s survey revealed that only two percent of respondents had completed their CECL transition process. Other key takeaways from the 2018 survey included:
- Nearly 80 percent of respondents noted they have representatives from accounting and credit involved in CECL preparations
- 32 percent of respondents felt that they had sufficient data (only 19 percent reported this in 2017)
- 76 percent of respondents felt that the data they collect will be useful for other applications
- 28 percent of respondents were evaluating third-party partners to help with the CECL transition, while 31 percent had already engaged in third-party support
Bankers that complete the survey will be among the first to receive the results once published this spring. Respondents will also be entered for a chance to win several prizes.
After the survey closes, Abrigo Risk Consultants Neekis Hammond and Chris Emery will walk through the survey findings, compare the 2019 survey results to those of previous years, and address how financial institutions can be best prepared to meet their respective deadlines. Bankers can register for a webinar on April 2 to see the results.
Abrigo provides both of the American Banker Association-endorsed solutions for CECL compliance, Sageworks ALLL and MST Loan Loss Analyzer, and the company offers complimentary webinars along with in-person events to assist institutions in their transition.
To take the 2019 CECL Survey, click here.