Considering SCALE or WARM CECL models due to perceived cost savings, simplistic modeling, or reduced time investment?

Before settling on a solution that may likely cause more questions, heartburn, and costs, consider the ValuCast proposition…a proven and defendable model with only 8 loan fields, 15 clicks, and 1 hour per quarter. 

Here’s a handy checklist to use:

✅ SSAE/SOC reports.

✅ Complete vendor management package (DR, InfoSec, IT Specs,etc.) and confirm financial stability.

✅ Review CECL Model Documentation.

✅ Minimum of 3 meaningful client references and preferably currently reporting.

✅ Ability to provide your bank with a trial run or proof of concept with your bank data.

✅ CPAs/CFAs/PhDs on staff.

✅ Expertise and staff that have experience and have gone through successful CECL implementations with other clients.

✅ The potential model has a proven track record. i.e., other clients are reporting live, and their auditors/regulators have accepted the model and methodology(s).

✅ Model has been audited and validated by reputable firms.

✅ The potential vendor must have a retention rate of at least 98% among the CECL client base. Make sure you clarify this one with the vendor! In fact, if the vendor has lost a CECL client, it should only be because that client was acquired.

✅ Peer data must be meaningful. Remember, no one has loss history.

✅ Clients that cutover from a competing solution and will serve as a reference.

✅ Software is being maintained and updated – ask for recent releases and product roadmap.

✅ Contains meaningful reporting including external GAAP and Call Reporting.

✅ End-to-End solution. (i.e., prepayment speed calculations, unfunded commitments, Q-Factors, Individually Assessed, etc.)

✅ In essence, as a user, you don’t have to leave the model to perform any piece of your CECL calculation.

✅ “All-in” costs are presented upfront to prevent your bank from being nickeled and dimed. Note licensing vs services so that you are comparing apples to apples.

✅ The potential vendor must provide an implementation timeline example or Gantt chart so you can see implementation details clearly and concisely.

✅ The potential vendor must have an appropriate implementation queue. Thousands of banks are adopting at the same time, so this one is significant. You can’t afford to miss critical deadlines.