To the extent of what they can, financial institutions have been processing the requirement demands being cast upon them with the new “Current Expected Credit Loss” (CECL) standard to be implemented. Through a process assessment, most institutions have slowly started to form a picture/plan of how to satisfy the requirements. The 2006 Interagency Policy Statement notes, “The loan loss allowance should take into consideration all available information existing as of the financial statement date, including environmental factors such as industry, geographical, economic, and political factors.”
Most financial institutions know that their lending processes need improvement. Unless the current lending process is automated from start to finish, there will always be room for process improvement.
As discussed in my previous blog, the question of a generation gap in banking is a bit nebulous. Depending on who you ask the answers can vary. One thing is clear, no generation is all branch or all digital. There is always a blend of services used and preferred methods for obtaining information.