Three significant technology gaps faced by financial institutions

By Lauren Smith

Digital tablet with business chart

Today, financial institutions face three fundamental technology gaps when accounting for and managing loan portfolios:

  • First, there is a divide between loan servicing systems and the general ledger. This gap has widened in recent years as the 2008-09 financial crisis left banks with many non-performing and modified loans on their balance sheets and a slew of new regulatory requirements.
  • Second, there is a gap between those who develop loan risk models and those who use them. The introduction of regulatory stress testing (DFAST and CCAR) highlighted this gap for many financial institutions. Bridging this gap will be critical to a successful CECL reserving process.
  • Third, there is a gap between relationship managers and risk managers for large commercial credits. This gap is driven by the manual nature of the review process throughout the asset lifecycle.

Addressing the gaps with a robust financial architecture

Many institutions use spreadsheets to fill the gaps between disparate systems and to address changing business needs. While this approach may meet the requirements in the short term, it leads to inefficiencies, operational risk, and is unsustainable in the long term.

Whether a result of new reporting requirements, a growth-related opportunity, or a strategic objective, financial institutions are frequently confronted by a changing business landscape. A strong technology foundation enables institutions to thrive by operating more efficiently, making better business decisions, and capitalizing on growth opportunities in spite of evolving business needs.

In partnership with Gartner, “Mind the Gaps: Bridging Technology Silos in Financial Institutions” by SS&C Primatics highlights the advantages of taking an architecture-based approach to bridge the technology gaps that exist within financial institutions. Read this whitepaper to learn more about technology gaps, why they are critical to an institution’s success, and how each can be resolved.

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