Banking

In the previous post about preparing for your CECL compliance deadline, we looked at the steps needed to analyze the credit risks within your loan portfolio, and clarify the credit quality indicators (CQIs) impacting those risks. These first two steps of this complex, lengthy lead up to your early or required implementation date should have provided you with a solid understanding of the composition of your loan portfolio.

The countdown that began June 16, 2016 is officially underway. The runway to CECL (Current Expected Credit Losses) compliance promises to be riddled with complexities. You don’t need to look much farther than the fact that FASB implementation dates are set several years out to get the sense of how important it is to take a long-term, multi-faceted approach to ensuring compliance.

For the banking industry, 2016 was a year marked by regulatory changes, new channels and heightened awareness of cyber issues, demographic shifts, and new ways of thinking about the role of community banks. Our team published 48 blogs in 2016.

Here are your top 10 most read posts, listed in order of popularity.

On December 14, 2016, the Federal Reserve boosted its benchmark interest rate by 25 basis points to a range of 0.5 percent to 0.75 percent. While this is still incredibly low by historical standards, it is notable because it’s only the second time since the financial crisis of 2008 that the Fed has raised this rate.

The move continues to support economic growth and sustains a friendly environment for borrowing and risk-taking. It also recognizes that the U.S. is enjoying strong employment and price stability, and healthy inflation, as well as positioning the economy to ride the expected acceleration that will occur as a result of the new Trump administration.

The allowance for loan losses (ALLL) standard (ASU 2016-13) known as CECL (Current Expected Credit Losses) was released June 16, 2016. The standard was proposed in 2012 and has been deemed the “biggest change to bank accounting ever.” It’s adoption changes 40 years of standards related to how banks account for changes in their credit risk. It promises to pose significant compliance and operational challenges, and implementation is well underway for some institutions.

At approximately 2:30 a.m. EST Wednesday, Donald Trump took a conciliatory call from Hillary Clinton and began his speech to accept the position as the 45^th President of the United States of America.

This morning, across the country, people woke to the news and a gnawing feeling in the pit of their stomach. Regardless of which candidate got our vote and whether we are feeling a sense of victory or defeat, we all share two questions—what does this mean and what is ahead for us? The reality is that we can’t know until we’re able to look back in hindsight.

By now, you may have heard that the U.S. Court of Appeals for the D.C. Circuit declared that Congress had taken unconstitutional action with the Consumer Financial Protection Bureau (CFPB) and introduced a swath of changes that stand to impact providers and consumers in numerous ways. The court's decision puts the CFPB directly under the control of the White House. Currently, the CFPB operates as an independent agency. There are arguments on both sides of that coin, some saying that the autonomy provides necessary stability for the U.S. economy and others saying that it offers a dangerous lack of checks and balances.

In today’s connected world, security breaches are inevitable. Especially for organizations that handle sensitive data like PII, it’s vital to be prepared. Looking at your business with a hacker mentality and putting a cybersecurity strategy in place are your best ways to ensure that when your day comes, you can bounce back without any major interruptions to your business or harm to your brand and reputation. 

It seems that community banks are under siege. From new and more stringent regulations to the presence of fintech startups to widening demographics that demand more personalization than ever before, it’s gotten harder and harder to stay relevant and compete. Innovation has to take into account the hard trends shaping our marketplace and set aside the space to anticipate and build foresight.  

Consumer banks and their customers have a new reason to be extra vigilant. Cyberthieves have begun using new malicious software (“malware”) programs to steal credentials from customers of large banks who enter their accounts via Apple iOS and Android based apps. Malware programs like Acecard and GM Bot are proving so pernicious because they can morph into customized overlays to imitate 50 financial-services apps. That feature is attracting the attention of cyber-thieves, mobile phone companies, cybersecurity, and bank regulators.

On July 1, 2016, the FDIC updated its Information Technology Risk Management Program (IT-RMP) with the Information Technology Risk Examination (InTREx) Program. Applicable to all FDIC-supervised institutions, regardless of size, InTREx is intended as a more efficient approach to its information technology and operations risk procedures. It enhances cybersecurity preparedness efforts and puts greater focus on identifying, assessing, and validating IT to ensure that management is able to effectively address institutional risk.

“Companies in the top quartile for racial and ethnic diversity are 35 percent more likely to have financial returns above their respective national industry medians… And diversity is probably a competitive differentiator that shifts market share toward more diverse companies over time.”[1]

Business and economics are at an inflection point. Hard trends like technology, globalization, and access to information have continued to evolve at such an accelerating rate that decisions about increasingly complex scenarios are being made faster than ever.