While many in banking remain vaguely aware of CECL—the current expected credit loss standard—there’s a point to getting past the tongue-twisting name: It signifies one of the most profound revolutions in financial services in generations. In fact, the industry is heralding CECL as the biggest accounting change in banking history. And as financial services organizations transition into it, Read More
Its model informs every major market change on a global scale: In January, the Payment Services Directive 2 (PSD2) arrived in Europe, forcing European banks to open up their application program interfaces (APIs) for the first time to fintech and other financial companies. In March, open banking arrived in the United Kingdom thus signaling an inevitable reinvention Read More
One way to look at banking, data, silos and credit loss is to consider the image offered by Peter Cherpak, Executive Vice President and Partner at Ardmore Banking Advisors in west suburban Philadelphia: “There’s a lot of lost bankers with spreadsheets all doing their own thing, running around, creating trial balances and information that is uncontrolled and Read More
Attorney Michael Dailey has tough decisions to make when he advises his bank clients how to adhere to the Department of Labor’s (DOL) regulations on fiduciary responsibilities. If he tells them to continue with compliance changes they’ve made thus far, he risks having them complete lots of work that they potentially won’t need. But if he tells Read More
BAI’s reporting on banking security issues has found that regardless of the threat and response, fraudsters are rapidly adapting not only to security measures, but also to where and how customers access their accounts. Meanwhile, financial institutions face a delicate balancing act; increase security without scaring away customers. Getting that balance right may represent the industry’s greatest Read More
The auditors are sharpening their pencils—and now's the time for banks to prepare for the Current Expected Credit Loss (CECL) standard. Tom Caragher of Fiserv walks us through everything banks need to know about CECL including which records to pulland which staff members to recruit to find to present first-rate data. From the podcast: Tom recently authored Read More
In September 2016, the Office of the Comptroller of the Currency (OCC) released final guidance for recovery planning that covered a broad range of financial institutions: insured national banks, federal savings associations and federal branches of foreign banks with more than $50 billion in assets. The deadline for an initial plan depends on the bank’s size; the Read More
If regulation is by the book these days, it might as well be from the “Harry Potter” series: the lost volume where brave bankers defend the castle from fire-breathing dragons that grow stronger, fiercer and more adept by the day. Harry recites spells. The dragons spit back and recite Federal Reserve Board Regulation Z, 12 CFR Part Read More
When the Consumer Financial Protection Bureau (CFPB) sued TCF National Bank in January, it charged that the Wayzata, Minn.-based bank was “tricking consumers into costly overdraft services.” According to the CFPB suit, the alleged “trick” involved an application process designed to obscure overdraft fees and make them seem mandatory for new customers opening an account. In fact, Read More
More than 25 years ago, Bill Gates declared: “Banks are dinosaurs." I would argue that the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010 is quickly reducing them to fossil fuel status. In his first 100 days in office, Donald Trump acted on his campaign promise to dismantle Dodd-Frank by signing an executive order that Read More
Time deposit owners always want the same thing: more yield and short commitment. But until recently depositors had little motivation to spend time and energy looking for options. Every choice was pretty discouraging due to the dominance of low rates. Bankers with plenty of non-interest bearing deposits demonstrated apathy to time deposit clients. Depositors traditionally search for Read More
In articles one and two of this three-part BAI Banking Strategies series, we outlined CECL, the Current Expected Credit Loss standard issued by the Financial Accounting Standards Board. Those pieces discussed a savvy approach to gather the required data, consisting of two crucial elements: First, assemble the right internal team to pull accurate data, with representatives from Read More
In June 2016, the Financial Accounting Standards Board (FASB) issued a new standard for the timely reporting of report credit losses on loans and other financial instruments—and in the process, created one of the most significant changes in recent years for financial institutions. The final version of the current expected credit loss standard (CECL) not only affects Read More
If necessity is the mother of invention, then there’s a new child in financial services that reconciles compliance and regulation with a seeming opposite: efficiency. RegTech—or regulatory technology—arguably represents the fastest growing segment in the scorching-hot FinTech arena. RegTech aims to take the ever-changing, complicated and constant demands of banking compliance and automate them. That means a Read More
In December, shareholders of Chicago-based PrivateBancorp postponed a vote on whether to accept a $3.8 billion acquisition offer from the Canadian Imperial Bank of Commerce. So what scrubbed the decision, given that the deal had been announced only five months prior? Market reaction following a populist wave that rumbled global politics played a key role—with the loudest Read More
Last June, the Financial Accounting Standards Board (FASB) issued the final current expected credit loss (CECL) standard as a prevention technique to avoid a future financial crisis. And if CECL is new to you, you’re not alone. In a recent Fiserv webinar, more than 70 percent of industry professionals polled admitted to being only “a little” or Read More
Wealth management firms find themselves at different stages of readiness as they work to comply with Department of Labor’s (DoL) new fiduciary rule announced in April 2016. All financial services firms that manage retirement assets are facing a significant challenge as they develop and execute plans to bring their business operations in line with the new rule Read More
Mortgage and auto loan providers are caught between a rock and a hard place after a ruling by the U.S. Supreme Court upheld the theory of disparate impact, which says that lenders can be found liable for discrimination against a protected class even if said discrimination was unintended. The ambiguity of the theory, and the lack of Read More
Online marketplace lending is an industry rooted in the innovative culture of Silicon Valley that may soon have to find its way in the bureaucratic culture of Washington, D.C. As one federal agency after another launches a study of the technology and business practices of non-bank companies that make online consumer and small business loans, the odds Read More
Handing someone a $100 bill is an instant payment. Likewise, proprietary systems such as PayPal and open, un-permissioned Bitcoin offer near real-time value transfer. For most consumers and businesses however, a leather or cryptocurrency wallet, cash under the mattress or PayPal isn’t their anchor liquidity instrument; it’s their demand deposit account (DDA). Every country has at least Read More
