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The banking industry, preparing for new Financial Accounting Standards Board rules coming late this year, crystallizes a conundrum many business face: the danger of too few people who know what to do.
In banking, some rule additions are on the way in the internal process regarding allowance for loan and lease losses. Raleigh, N.C.-based data firm Sageworks polled more than 600 attendees at a recent industry conference, including bankers and credit union executives, to gauge the core anxieties that loom with the changes.
More than two-thirds, 67%, of the respondents say merely one or two people from their entire organization handle their allowance process, according to the Sageworks report. “This could be viewed as a limitation if those few individuals left the institution or were elsewhere assigned — the experience would be lost, and the process may not be easily replicable,” the data firm states in the release.
At least four of 10 respondents, 41%, believe the process is too cumbersome, the reports shows, while 37% say using legacy spreadsheets is a big current issue. And 19% say another issue is lack of innovation, in that the process has been done the same way for years with no improvements.
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