One of the most important functions in a financial institution is loan analysis. Historically, financial institutions were only able to analyze their loan portfolios through a series of databases and spreadsheets. This painstaking process could take months and had limited outputs. Thankfully, there are options available for analyzing and interpreting data quickly and accurately. Utilizing Visible Equity’s credit risk software can expedite and improve loan analysis in six key ways:
- Data integrity – One of the largest issues financial institutions face during loan analysis is data integrity. Often, financial institutions cannot easily access the information they need to run sufficient analysis. If inaccurate information is used for the analysis, reports will be of no use to the financial institution. The first step in resolving this issue is to get a handle on what data is being collected, where that information is stored and the accessibility of that information. Next, the organization must decide what information is important to know and understand. After all, a thorough portfolio analysis can benefit individuals throughout the organization and can be used to generate additional revenue. Once the needs of the organization are understood, important data can be stored – and analyzed using credit risk software.
- User Friendly Interface – Now that quality data is available, it is important to have a user friendly way to access and run reports on that data. An intuitive, user friendly interface is the ideal way to provide team members with the tools they need to analyze the loan portfolio. The tool provides standard report as well as ad hoc reporting, effortlessly and provides data in an easy to read format.
- Saving Time – Many organizations can spend weeks or even months compiling and analyzing data. In fact, by the time the data has been thoroughly analyzed it may be out of date. Certain analysis tools perform these same functions in a matter of minutes. This allows your team to spend less time crunching numbers and more time using the results of the loan analysis to make strategic decisions. These labor hours can then be used to enhance other areas of the organization or to focus on your financial institution’s key business objectives.
- Identifying Trends – Determining trends is a key function of loan analysis. Trending information can be used to determine opportunities for additional revenues as well as isolate loans that have the potential to become losses. These trends may not easily be seen when looking at data manually with spreadsheets and databases due to the sheer amount of information. High-value analysis tools allow loans to be evaluated at a high level, by customer profile or several other characteristics in order to pick up patterns and trends.
- What If Analysis – A “What if” analysis provides a way to evaluate future outcomes based on specific scenarios. Rather than making educated guesses on how a situation will turn out, users are able to see accurate information based on a number of scenarios. This allows leadership to consider multiple strategic approaches to portfolio management and then see the actual effect of those changes.
- Satisfy Regulators – It is common for financial institution leadership to be concerned about examinations. The use of loan portfolio analytics software can help to alleviate and address these concerns. Once implemented, the software may be used to address a number of the regulators questions. This includes running reports to provide requested information within minutes.
Looking for additional information expediting and improving the loan analysis of your financial institution? Contact a member of the Visible Equity team today.