Why Small Credit Unions Can’t Survive Without Analytics
In an increasingly complex and competitive financial environment, small credit unions are on the ropes. Implementing efficiencies through reliance on a data analytics program might be their best chance to not just survive, but thrive.
3 Best Practices to Prepare for Your Regulatory Examination.
It is highly likely that in your upcoming regulatory exam is there will be something that you are not 100% prepared for. As all of you have experienced and as we see every day working with clients, something new to the institution is nearly always brought up. However, there are some best practice...
Dear Hilary – Data Uploads
Dear Hilary, How often should files be uploaded to Visible Equity? Do all of the data elements need to be loaded each time we upload files?
Dear Hilary – File Frequency
Dear Hilary, We are a new client, and we are a little confused on how often we should upload the files for both loan analytics and application analytics. Can you clarify this for us?
Loan Analysis for Dummies
You might remember a day when everyone who defaulted on a loan you knew by name, or which businesses owners down the street had a line of credit. As institutions mature and grow these scenarios become few and far between. Five defaults become hundreds and simple business credit lines become compl...
Important Metrics Needed When Analyzing Credit Union Loans
Relatively speaking, intensive data analysis by financial institutions to determine loan portfolio health is a new phenomenon. But a volatile decade marked by a massive real estate bubble, the worst economic crisis in 80 years, and a snowballing recovery has provided an ideal trial environment t...
Cleaning up Data for Loan Portfolio Management
Working with Data: One of the most important aspects of working with data requires understanding the difference between good and bad data. Good data forms the basic building block for loan portfolio management and can often mean the difference between good and bad decisions. What does good data l...
How Analytics Has Helped Vantage West Credit Union
So what does FIT mean in this context? Is it FIT for consumption by members of management and the board of directors? Does FIT pertain to the “size and complexity of the organization” as financial regulators like to state? The answer is yes and yes,...
Dear Hilary – Expected Loss by Probability of Default
Dear Hilary, We are currently working on using Visible Equity’s expected loss by probability of default figure to set reserve amounts, and we were wondering how the probability of default is calculated?
Credit Union Loan Delinquency Analysis and Unemployment Trends
Recent economic data indicate that the national unemployment rate is slowly receding from the peak of the Great Recession. Economists continue to debate whether the economy is actually adding jobs or whether more people are leaving the labor market altogether, thereby lowering the denominator in...
Why You Need Web-Based Loan Management Software
It took almost 15 years, amid countless stops and starts — with a few surprises and scares in between — but web-based applications at last have hit the financial services mainstream on both sides of the proverbial teller counter.
Dear Hilary – Defining Delinquencies
Dear Hilary, I noticed within Visible Equity, delinquency is defined as a loan that is equal to or greater than 60 days delinquent; however, our institution defines delinquency differently. Is this something that can be changed?
Beware of These 6 Data Gaps in Your Lending
Managing a loan portfolio is no easy task. To properly manage any loan portfolio in today’s economy you need your data to be solid. Over the years having worked with thousands of different data sets we see the same issues occur over and over again. Here are 6 of the most common problems we see wi...
Don’t Let Bygones be Bygones – Learn from Your Underwriting Mistakes
Whoever came up with the old adage “let bygones be bygones” must not have had a sound understanding of loan portfolio analytics. This concept of learning from underwriting mistakes may seem obvious; however, financial institutions too often become so set in their comfortably outdated underwriting...
4 Ways to Become the MacGyver of Lending
Nothing against Iron Man or James Bond, but superheroes with special powers and secret agents with million-dollar toys and a sniper’s aim pale to Macgyver in terms of ingenuity.
Which cars hold their value the best?
If you were to guess which car retains its value best, what would you think? A BMW? A Mercedes? How about which cars depreciate the most? A Ford? GM? As it turns out there is quite a discrepancy when it comes to which vehicles hold their value. The Toyota FJ Cruiser tops the list of vehicles...
4 Credit Union Membership Marketing Ideas to Implement This Year
Face it: The credit union brand isn’t nearly as strong as its value and impact warrants. Poll after poll reveals that a majority of Americans have a vague or nonexistent awareness of credit unions, even though objective analyses consistently demonstrate they offer consumers more favorable rates...
6 Loan Portfolio Metrics You Might Not Be Reporting On
Go to any industry conference and you’ll hear the almost incomprehensible statistics about the amount of data flowing online daily. Loan portfolio management data is no exception. Just as economists have demonstrated that building new roads doesn’t reduce congestion, but simply increases the amo...
Dear Hilary – Total Commitments
Dear Hilary, Within Visible Equity, how are you all defining “Total Commitments”? Sincerely...
How Accurate Loan Portfolio Analysis is Tied to Your Bottom Line
Thanks to improving consumer credit and pent-up demand for durable goods such as vehicles and appliances — not to mention a brightening purchase mortgage environment — many economists forecast double-digit loan growth again in 2015.
Dear Hilary – File Limits
Dear Hilary, I am a new client, and I am wondering if there is a limit to the number of files I can load into Visible Equity every month?
Dear Hilary – Credit Score Pulls
Dear Hilary, We are trying to decide how often we will pull updated credit scores. What is recommended? What are your other clients doing?
Loan Portfolio Analysis Tools You Might Not Be Aware Of
The advent of complex loan portfolio management software has opened a new world of possibilities
Fair Lending Training – Types of Discrimination & Prohibited Practices
The is the second article on our Fair Lending Training series – Types of Discrimination & Prohibited Practices. In this article we cover types of discrimination such as disparate treatment and disparate impact and prohibited practices that fall under ECOA and the FH Ac.
Best Practices for Commercial Real Estate Portfolio Analysis
The complexity and volatility of the commercial real estate (CRE) market — particularly in relation to residential real estate — demands that financial institutions, participating in CRE, scrutinize their investments more frequently and fervently.
Dear Hilary – Finding Charge-off Loans
Dear Hilary, Within Visible Equity, how can I view individual or a list of the charged-off loans?
Avoiding Analysis Paralysis with Loan Management Software
One of the common issues we see lenders face as they become more familiar with their data is analysis paralysis. Analysis paralysis happens when someone over thinks (or analyzes) a situation to the extent that no action is ever taken. This literally means the analysis is paralyzed. This problem i...
Key Metrics for Analyzing Auto Loan Portfolios
Auto loans — especially those for used vehicles — have long been a staple of credit union loan portfolios, both via the direct and indirect route. Together, new- and used-vehicle loans comprise about one-third of all credit union loans, in terms of dollars, and 13% of all credit union members ha...
Dear Hilary – Multiple Collateral Pieces
Dear Hilary, Our institution has loans with multiple pieces of collateral. Sometimes a loan can have up to 10 pieces of collateral. Is that going to be okay? How would you like us to send over the data?
Implementing HELOC Reviews as Part of Your Loan Portfolio Management Process
One of the most critical components to your loan portfolio risk assessment is the ever challenging HELOC review. The challenges of successfully performing this review all lie in the fact that there are many moving parts and you may not have control or...
FAQ’s from Webinar: Is ‘Hot Money’ Hiding in Your Deposit Portfolio?
This year we are hosting monthly webinars on various analytics topics. These webinars are in-depth, educational, and overall well worth your time both from a product perspective and an industry perspective.
FAQ’s from Webinar: Are you effectively analyzing your loan application data?
This year we will be hosting monthly webinars on various analytics topics. These webinars will be in-depth, educational, and overall well worth your time both from a product perspective and an industry perspective.
Dear Hilary – Loss Given Default
Dear Hilary, I am looking at the loan detail for a specific loan, and I am wondering what loss given default is? How is the loss given default calculated for loans that don’t have collateral?
Dear Hilary – Calculating Profitability
Dear Hilary, How does Visible Equity calculate the profitability I am seeing in the Loan Analytics product? Sincerely, Seeking Profit
Fair Lending – Redlining and the Redlining Ratio
Redlining refers to the illegal practice of refusing to make loans or imposing more onerous terms on borrowers because of the racial, national origin, or other prohibited basis characteristics of the residents of a subject neighborhood.
Four Strategies to Grow Credit Union Membership
With a growing number of new competitors entering the financial services space combined with a bevy of new regulations and their subsequent compliance costs, credit unions are discovering that traditional membership growth strategies may not be enough for long-term sustainability.
Dear Hilary – Helping with Examiners
Dear Hilary, A few weeks ago, Derrick wrote about the “3 Best Practices to Prepare for Your Regulator Examination.” He made a suggestion for the minimum reports we should be running, but is there any way someone could help us get prepared for the examiners and help us run reports?
3 Risk Management Strategies Every Credit Union Should Employ
Trying to ensure safety and soundness is not as easy as it seems given the litany of risks that credit unions face on a daily basis. Regulators have stepped up their assessment of scenarios that can potentially bruise and even kill areas of operations. To help minimize risks, credit unions should...
Assessing Your Fair Lending Risk
In most things in life a complete and honest assessment of a situation is a good place to start. Businesses and others use SWOT analysis to identify their Strengths, Weaknesses, Opportunities, and Threats. The military uses a GRAT, a Ground Risk Assessment Tool, to aid decision making for ground...
How Member/Customer Analytics Can Impact Your Bottom Line
More so than other financial institutions, credit unions’ health depends on the choices made by consumers who use their products and services. Whereas banks can solicit supplemental capital freely, engage in speculative real estate deals, concentrate their holdings in business lending, and gen...
Producing Irresistible Reports in an Unsexy Industry. Loan Portfolio Reports For Management That Get Read!
For years, loan portfolio analysis was churned out using Excel features like vlookups and pivot tables, but that’s largely changed due to lenders needing more robust analytical software platforms.
Loan Portfolio Data: What to Look For in Your Analysis
Sometimes, to make sure you’re taking steps forward, it helps to look a long ways back. Consider this passage from an Office of the Comptroller of the Currency (OCC) guide on managing loan portfolios: “If a bank lacks adequate data on each loan or does not possess a system to ‘slice and dice’ th...
Dear Hilary – CRE Stress Testing
Dear Hilary, I noticed you have a CRE Stress Test report. What is required to ensure this report has good numbers?
Managing Lending Growth: 5 Strategic Investments Your Team Can’t Live Without
Fueled by a surge in auto, credit card and other unsecured loans, credit unions added $10.2 billion in loans in June, which reflects a 10.9% year-over-year increase — the fastest growth in history, according to CUNA Mutual Group.
Why Small & Mid-Sized Credit Unions Cannot Live Without Analytics
The examiner sat across the desk from me, polite but persistent. “How do you know?” was the question he kept asking. We were discussing our Allowance for Loan and Lease Loss (ALLL) account. “How do you know your balance is sufficient? How do you know your methodology is adequate? How do you know?...
7 Key Customer Analytics Metrics You Should Be Reporting On
What characteristics do our highly profitable and/or highly loyal customers share? That’s the question every organization needs to ask itself at every level of its operation, and at every juncture of its strategic planning process. Set your mission to both focus your attention on that existing c...
Be like Scott: How to Adopt a Risk Based Lending Model, Lessons from Scott Adkins CEO of SECUWA
Risk Based Lending is a tiered pricing model used to assign loan amounts, rates, and fees based upon borrower’s ability to repay within each tier level. Most lenders have their own methodology to determine each tier, using such factors as credit score, debt to income, job history, among other rep...
7 Unexpected Uses for Lending Analytics
Did you know that Play-Doh originated as a wallpaper cleaner, to remove the stains produced by coal-powered furnaces?
Dear Hilary – Determining Race in Fair Lending
Dear Hilary, I am trying to understand the Fair Lending reports. Can you clarify for me how exactly Visible Equity is able to determine the race of a borrower?
5 Loan Portfolio Metrics your Analysts are Missing by not Combining Your Data in One System
“Our lives are defined by opportunities–even the ones we miss,” Brad Pitt pronounces in The Curious Case of Benjamin Button, the 2008 movie in which he nails the peculiar lead role. There’s much truth in that statement, whether you place the focus on your personal or professional life.