Equifax,
a global data, analytics, and technology company, and Wolters Kluwer’s
Finance, Risk & Reporting (FRR) business, are teaming up to provide an
end-to-end Current Expected Credit Losses (CECL) solution. The companies
are combining their respective CECL offerings and capabilities to help
financial institutions comply with new standards instituted by the
Financial Accounting Standards Board (FASB) for a complete solution that
ensures an integrated and supportable framework.
These new CECL standards will take effect in the first quarter of 2020
for financial institutions that are registered with the U.S. Securities
and Exchange Commission (SEC), and in the first quarter of 2021 for
financial institutions that are not registered with the SEC.
The
OneSumX CECL solution leverages Wolters Kluwer’s integrated finance,
risk and reporting platform, enabling compliance with all CECL
requirements, from data management and governance, to credit risk
models, expected credit loss calculations, accounting and disclosures.
OneSumX CECL, which will now house Equifax’s SmartReserve™ models, also
leverages its state of the art accounting framework with Wolters
Kluwer’s Regulatory Update Service (RUS) to apply and maintain all
required allowance accounting, producing all FASB mandated disclosures.
Equifax’s SmartReserve™
offering helps SEC-registered financial institutions comply with CECL
requirements by obtaining the necessary historical loan performance data
and insights for compliance with the standard. The models within
SmartReserve use robust historical data, producing a reliable life of
loan loss estimates.
Todd Lawrence, General Manager of Wolters Kluwer FRR Americas,
commented, “All firms impacted by CECL need to ensure they are firmly on
the road to compliance. Equifax brings credit content and methodologies
to this exciting partnership which draws on our award winning OneSumX
suite of technology solutions and deep rooted expertise in integrated
finance, risk and reporting. The combined offering uniquely facilitates
a successful CECL process in the eyes of regulators, auditors and boards
of directors.”
“This is new territory for many lenders as they may not have the
infrastructure to support these large amounts of data, and mid-tier and
smaller banks and credit unions and lenders may not have the capacity to
perform the modeling in-house,” said Amy Graybill, Vice President,
Enterprise Insights & Core Data Products, Equifax. “Our SmartReserve
provides the assistance lenders need to help protect their business
against non-compliance with new CECL standards, along with historical
pre and post-recession data that is needed to accurately forecast future
credit losses and calculate required reserves.”
SmartReserve offers flexibility for benchmarking and assumption setting
using historical performance by product, geography, score range, and
vintage to establish guardrails and benchmarks for CECL analysis. The
solution also helps banks develop loss rate assumptions that provide
additional support to CECL model outputs for discussions with
regulators. The data allows customers to compare portfolio loss
performance with peer banks to inform the bank’s credit policy and
improved credit decision making.
Wolters Kluwer FRR, which is part of Wolters Kluwer’s Governance, Risk &
Compliance division, is a global market leader in the provision of
integrated regulatory compliance and reporting solutions, supporting
regulated financial institutions in meeting their obligations to
external regulators and their own boards of directors. Last year Chartis
Research named Wolters Kluwer a Category Leader in its CECL Technology
Solutions report.
About Wolters Kluwer Governance, Risk & Compliance
Governance,
Risk & Compliance (GRC) is a division of Wolters
Kluwer, which provides legal and banking professionals with
solutions to ensure compliance with ever-changing regulatory and legal
obligations, manage risk, increase efficiency, and produce better
business outcomes. GRC offers a portfolio of technology-enabled expert
services and solutions focused on legal entity compliance, legal
operations management, banking product compliance, and banking
regulatory compliance.
Wolters Kluwer (AEX: WKL) is a global leader in information services and
solutions for professionals in the health, tax and accounting, risk and
compliance, finance and legal sectors. Wolters Kluwer reported 2018
annual revenues of €4.3 billion. The company, headquartered in Alphen
aan den Rijn, the Netherlands, serves customers in over 180 countries,
maintains operations in over 40 countries and employs 19,000 people
worldwide.
About Equifax
Equifax is a global data, analytics, and
technology company and believes knowledge drives progress. The Company
blends unique data, analytics, and technology with a passion for serving
customers globally, to create insights that power decisions to move
people forward. Headquartered in Atlanta, Equifax operates or has
investments in 24 countries in North America, Central and South America,
Europe and the Asia Pacific region. It is a member of Standard & Poor’s
(S&P) 500® Index, and its common stock is traded on the New York Stock
Exchange (NYSE) under the symbol EFX. Equifax employs approximately
11,000 employees worldwide. For more information, visit Equifax.com and
follow the company’s news on Twitter and LinkedIn.
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