Much goes on before conducting any analysis of the ALLL. Many financial institutions must first gather and ready their data, which consists of pulling it from their core or other departments, validating balances, and manipulating it into a usable format, among other things. Some institutions choose to deploy an automated solution which integrates with the core and bypasses the often time-consuming process of gathering and readying the data.

Another component of preparation which often goes overlooked is the establishment of a succession plan. Regulators require a repeatable methodology when determining the ALLL, so as a part of preparation, financial institutions should consider implementing a contingency plan in the case that their usual process gets disrupted.

Preparing for the ALLL