Moody’s Analytics CECL Solutions

Moody’s Analytics is uniquely positioned and dedicated to helping financial institutions implement the CECL accounting standard and then fully incorporating this significant change into your allowance and credit infrastructure. Throughout implementation, we offer extensive data, modeling, forecasting, and advisory services to help institutions build more profitable, forward-looking strategies. 

 

We provide a modular and integrated set of solutions that span the credit lifecycle, ensuring that data captured at one point of the process can be reused efficiently throughout.

CECL and the Credit Lifecycle
CECL and the Credit Lifecycle

CECL is a significant component of this lifecycle, and our ability to understand how to process your CECL allowance within the entire credit lifecycle leads to efficiency gains. This enables institutions to compete by effectively managing the risk return of their portfolios and creates a better way to allocate capital across business units.

Implementing CECL
Implementing CECL
Moody’s Analytics has worked with hundreds of organizations for both the adoption and ongoing processing of their CECL allowance estimates. Moody’s Analytics can support the requirements necessary to help your organization with this complex accounting. Whether you need models to measure credit risk, reasonable and supportable forecasts, data or a full framework, we have both the tools and the expertise to help.

If you’re looking to enhance or automate your CECL process, Moody’s Analytics award-winning ImpairmentStudio™ platform brings these capabilities together. The highly interactive and user-friendly CECL solution helps you address the operational complexities of this evolving accounting standard. Moody's Analytics offers unparalleled customer support throughout the entire implementation process. Our CECL experts are here to help you through every step to ensure a successful implementation, and will continue to service the needs of your institution after deployment.
An Overview of Our CECL Capabilities

Data

CECL places significant requirements on a company’s data management programs. This includes the need for current data as well as robust historical data to consider within your CECL estimates. Moody’s Analytics can assist with our award-winning data to help you develop, improve, and validate your data and credit risk models. We offer credit, economic, and financial datasets.

   




Scenarios

A key requirement within the CECL guidance is the use of "reasonable and supportable" economic forecasts. Moody’s Analytics can help your company by providing our industry-leading economic scenarios that have been developed using our proprietary econometric models.

  

 

 

 


Models

Many companies have chosen to solve for CECL using credit loss models to determine the likelihood and extent of future losses. Moody’s Analytics can assist you in addressing this challenge for your unique portfolio composition with our best-in-class modeling methodologies. We help clients assess, manage, and validate models for CECL requirements and consistency with industry standards.

 

CECL Calculation Engine

Moody’s Analytics has generated an award-winning framework to run your CECL process across various asset classes and methodologies. Our solution will allow you to run an integrated, scalable credit allowance process and step-by-step CECL analysis. The powerful engine features built-in analysis tools for meaningful and efficient decision-making.

  

 


ImpairmentStudio Solution

ImpairmentStudio Solution

Simplify your allowance analysis by:

  • Centralizing and reconciling data from multiple sources
  • Integrating with Moody’s Analytics industry-leading macroeconomic scenarios
  • Interacting with Moody’s Analytics and clients' own credit risk and allowances models
  • Applying a powerful CECL calculation engine supporting a range of methodologies
  • Making better decisions with built-in analysis tools and management overlays
Beyond CECL
Risk Grading Module
Credit Origination

Adopting CECL starts with credit origination. Collecting accurate and standardized data from borrowers at the point of credit origination benefits all downstream processes, including the calculation of loss allowances. To do this successfully, financial institutions must implement automation and digitization technology to streamline the credit assessment and origination process.

The CreditLens™ platform integrates with our award-winning ImpairmentStudio solution, eliminating the need for manual data entry and further improving your data integrity.

Stress Testing and Capital Planning

Even before completing your CECL adoption, your organization should consider how to plan and forecast with the new allowance accounting in place. Moody’s Analytics is helping many organizations do so by usingour credit risk models and economic scenarios. We also offer an automated framework with the ability to forecast CECL provisioning.

Moody's Analytics Capital Risk Analyzer combines economic, credit, and accounting know-how to help organizations evaluate strategic decisions based on financial and regulatory metrics for capital planning and stress testing (DFAST, EBA).

Awards & Accolades

  • Current Expected Credit Loss (CECL)

    For the second straight year, Moody's Analytics has won the Current Expected Credit Loss (CECL) category in the Chartis RiskTech100®. At the center of our CECL solution is the cloud-based ImpairmentStudio™ platform. The platform combines Moody's Analytics credit risk data with our best-in-class analytics and deep experience in impairment accounting to let firms identify the risks, and opportunities, that CECL presents.

  • Enterprise Stress Testing

    Moody's Analytics has won the Enterprise Stress Testing category in the Chartis RiskTech100® for the third time. Anchored in our industry-leading modeling expertise, Moody's Analytics stress testing solutions help banks meet their stress testing challenges while extracting business value from the results.

  • Enterprise-Wide Stress-Testing Product of the Year

    Moody’s Analytics has won seven categories in this year's Risk Technology Awards, including Enterprise-Wide Stress Testing Product of the Year for the second year. To manage financial risk, banks must understand the potential impacts of different economic scenarios on their credit portfolios. Moody’s Analytics solutions help them achieve both goals.

  • Credit Stress-Testing Product of the Year

    Moody's Analytics has won the Credit Stress-Testing Product of the Year in this year's Risk Technology Awards. Our solutions drive stress testing and forecasting programs at banks around the world. Customers make use of the insights gained from stress testing to fulfill regulatory requirements, perform capital planning, and make better and more strategic business decisions.

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