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ALM Goes to the Front of the Line

Regulators are coming down on CUs that don't do thorough ALM.

November 26, 2010
KEYWORDS economic , regulators
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Focus on these seven risks

Jon Heath, senior financial consultant for Fiserv’s Wisdom suite of financial management and accounting solutions, cites seven risks credit unions should focus on:

1. Interest-rate risk: Changes in market interest rates that could adversely affect a credit union’s capital and earnings.

2. Liquidity risk: Risks arising from a credit union’s ability to meet its obligations when they come due.

3. Credit risk: Risks arising from an obligor’s failure to meet terms of any contract with the credit union, or otherwise perform as agreed.

4. Transaction risk: Risks arising from fraud or error that result in an inability to deliver products or services, maintain a competitive position, and manage information.

5. Compliance risk: Risks arising from violations of or nonconformance with laws, rules, regulations, prescribed practices, internal policies and procedures, or ethical standards.

6. Strategic risk: Risks arising from adverse business decisions, improper implementation of decisions, or lack of responsiveness to industry changes.

7. Reputation risk: Risks arising from negative public opinion or perception.


Resources
Fiserv, Brookfield, Wis.: 800-872-7882
Open Solutions, Glastonbury, Conn.: 800-226-5674
Plansmith Corp., Schaumburg, Ill.: 800-323-3281
ProfitStars, Allen, Texas: 800-356-9099

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