ALM Goes to the Front of the Line

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