While mandated implementation might be delayed, Experian and Oliver Wyman are still looking to help auto finance companies meet the initial set of deadlines for the Financial Accounting Standards Board’s current expected credit loss (CECL) model via a new solution and webinar.
According to a news release distributed on Wednesday, Experian and Oliver Wyman have joined forces to help financial institutions adhere their portfolios to the new guidelines. Delivered through Experian’s Ascend Technology Platform, Ascend CECL Forecaster is a new user-friendly, web-based application that combines Experian’s loan-level data as well as third-party macroeconomic and valuation data with Oliver Wyman’s CECL modeling methodology in an effort to accurately calculate potential losses over the life of a contract.
“Financial institutions across the board feel unprepared and overwhelmed with the new accounting standards on the horizon — in fact, many lack the historical data and technology required to meet the new guidelines,” said Robert Boxberger, Experian’s president of decision analytics, North America.
Our collaboration with Oliver Wyman is designed to streamline the road to compliance — but more importantly, enables lenders of all sizes to continue to properly assess their portfolios and help borrowers secure affordable access to credit,” Boxberger continued.
Built using advanced machine learning and statistical techniques, the web-based application is designed to maximize the more than 15 years of historical credit data spanning previous economic cycles to help financial institutions gauge loan portfolio performance under various scenarios. Experian pointed out Ascend CECL Forecaster does not require additional data nor does it require a secondary integration from the financial institution and enables organizations to more quickly test their portfolios under different economic factors.
Moreover, financial institutions receive guidance from industry experts to assist with implementation and strategy, according to the firms.
“Oftentimes financial institutions need to ask the question, ‘Do I build or buy?’ The former tends to require significant cost, time and resources, such as data and technology,” said Anshul Verma, who leads the CECL product development at Oliver Wyman.
“Ascend CECL Forecaster dramatically reduces the need for additional resources and consolidates necessary data and advanced technology under one umbrella, and ensures the capability remains world class as the regulatory requirements or business needs evolve. Large financial institutions with an existing CECL solution will also find immense value in having an independent tool as the benchmark to provide added comfort in results given the complexity and scrutiny involved,” Verma continued.
Ash Gupta, a senior advisor to Oliver Wyman and former chief risk officer for American Express, shared this assessment.
“Ascend CECL Forecaster is a critical capability needed urgently by all lending and financial institutions,” Gupta said. “The collaboration between Experian and Oliver Wyman allows a frictionless synthesis of industry data, capabilities and experience to serve customers in both first and second line of defense.”
Experian’s Ascend Technology Platform has been helping businesses, including the world’s top financial institutions, stay ahead of rapidly changing consumer behaviors since 2017. Through the platform, customers can build their own predictive models and gain actionable insights by applying machine learning and AI techniques to vast amounts of anonymized credit, client and alternative data sets. Its analytical tools mine rich layers of content to gain unique insights about businesses and consumers.
Results are delivered in near real-time, via flexible self-service tools and powerful visualizations, all supported by industry-leading data security.
To help financial institutions better understand and prepare for the upcoming CECL standards, Experian and Oliver Wyman will host a webinar on Aug. 22 1 p.m. ET. To register, go to this website.
For more information about Ascend CECL Forecaster, visit http://www.experian.com/cecl.