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5 Top takeaways from the 2017 Risk Management Summit

Mary Ellen Biery
September 27, 2017
Read Time: 0 min

The hundreds of people attending the 2017 Risk Management Summit hosted by Sageworks heard from dozens of thought leaders in the financial services industry. As a result, bank and credit union leaders came away from Denver and the three-day summit, which ended Wednesday, with a wealth of advice. They learned how to prepare for the current expected credit loss model (CECL) and leverage the change to better manage the business, and they found out about new perspectives for improving lending processes and risk management. The Sageworks Risk Management Summit is the industry’s
leading life-of-loan conference, with topics spanning business development
through portfolio risk in a CECL world. The 2018 Summit will be held Sept. 24-26, 2018, in Chicago.

Here are five of the top takeaways from the 2017 Risk Management Summit (along with presenters’ names):

1. Your institution can transform “lenders” into “bankers” and “advisors” so that you generate more full relationships with clients. 

Start by clearly defining what business problems or decisions the institution wants its bankers to help clients handle better. After that, steps include clarifying what expertise is needed for team members to be able to provide that help and determining how to train and retain the people with the highest expertise. (Nick Miller, Clarity Advantage)

2. CECL Committees need to consider six key items. 

As financial institutions form committees to implement CECL, establishing group objectives and milestones are important. Six key items for committees to consider are data, methodology elections (i.e., segmentation, loss rate options, forecasting etc.), possible use of a vendor, financial reporting/disclosures, audit considerations and capital planning. (Tim McPeak, Abrigo)


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3. Stress testing can be used for more than just managing CRE concentration risk. 

Financial institutions can use results of stress testing to evaluate the impact and quality of new business to:

• Determine if the institution is “giving” on structure in order to gain market share

• Help evaluate risk associated with upcoming maturities (i.e., is any particular “vintage” more vulnerable than another is?)

• Identify vulnerable borrowers, allowing more proactive management (e.g., pressing for required financial info, more frequent monitoring and a more critical view of modification requests). (Liz Williams, CEIS)

4. The single most critical item of both a successful CECL calculation and a stress testing program is accurate data. 

Most banks struggle with the quality of their data, but having the right data and the right amount of data for CECL will be a key issue addressed by regulators. Banks need to develop a regular data-validation plan as part of their CECL planning. (Rob Ashbaugh, Abrigo)

5. Don’t overlook other earnings assets (besides loans and leases) that will be subject to CECL. 

CECL will require an allowance on Held to Maturity debt securities to be made for expected losses when the security is purchased. For purchased financial assets with credit deterioration (PCD assets), the entity must record as the amortized cost basis the sum of the purchase price and its estimate of credit losses as of the date of acquisition. Thereafter, PCD assets will be in the scope of CECL. (Hurlock & Lau, Smarter Risk Management)

Learn more about the events Abrigo regularly hosts on a range of topics, including regulatory changes and best practices for portfolio risk management and growth. Event organizers can also request an Abrigo speaker for an upcoming event.

About the Author

Mary Ellen Biery

Senior Strategist & Content Manager
Mary Ellen Biery is Senior Strategist & Content Manager at Abrigo, where she works with advisors and other experts to develop whitepapers, original research, and other resources that help financial institutions drive growth and manage risk. A former equities reporter for Dow Jones Newswires whose work has been published in

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About Abrigo

Abrigo enables U.S. financial institutions to support their communities through technology that fights financial crime, grows loans and deposits, and optimizes risk. Abrigo's platform centralizes the institution's data, creates a digital user experience, ensures compliance, and delivers efficiency for scale and profitable growth.

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