Risk management at credit unions has grown into an increasinglycomplicated process, and successfully integrating this criticalbusiness and compliance need with financial performance measurementand analysis has become an industry-wide challenge.

Credit unions must consider implementing a hosted Web-based orcloud portal that delivers enterprise performance managementcapabilities by integrating real-time, accurate financial data withrisk, budgeting, forecasting and reporting processes.

Cloud portals provide a cost-effective, single sign-on platformto support risk modeling, planning and financial analysis. Anintegrated cloud-based platform can help credit unions makebetter-informed business decisions and implement effectiveperformance strategies, enabling them to keep up with evolvingregulatory mandates as well as the challenges of managing netinterest margins and revenue growth pressures.

New Tools for Enterprise Performance ManagementAnalysis

With today's thin margins and reduced revenues, credit unionsmust monitor performance and achieve results faster. The aim ofenterprise performance management – the overarching businessmanagement discipline that frames the condition, prospects andrisks facing every financial institution, big or small – is toimprove business performance and ensure the execution of theorganization's business strategy.

A key differentiator for credit unions looking to grow is theability to unify strategic decision-making and operationalexecution of enterprise risk and financial performance managementin a dynamic, interactive and adaptive way.

Enterprise performance management helps address the primaryconcern facing credit unions of all sizes: how to protect valuewhile simultaneously growing profits. Protecting assets isanother name for managing risk, and a certain amount of risk isinherent in sustaining and growing a business.

For a credit union, enterprise performance management assists inweighing the business decisions before it: How can consumer loanprofitability grow in alignment with the credit union's riskappetite? What are the best business strategies for dealing withthe impact of continued low short-term interest rates? Should itsmarketing strategy be shifted to focus on expanding member “shareof wallet?”

An integrated, Web-based portal supports the enterpriseperformance management perspective for credit unions, enabling theconvergence of traditional financial risk management and financialperformance management.

In general, credit unions can expect these portals to assist inimprovements in business agility. Furthermore, these portals provide themanagement team with detailed insight and analysis, which they canuse to continually monitor strategy and update plans in light ofchanging business conditions, especially as results are reportedand analyzed in a continuous, dynamic cycle.

The portals are particularly effective for expediting financialinformation delivery, addressing the need for collaboration withinthe credit union around risk and financial management processes,and facilitating associated business decisions.

Integrate Risk, Budgeting and ReportingTechnology

Credit unions require efficient processing of multipleforecasting scenarios and significant transaction volumes but asolution that offers all this must be easy to use and not costprohibitive. The current need is for a cloud-based portal thataddresses the diverse challenges and requirements facing creditunions today by making it easier for end users to manage and switchbetween multiple applications, while seamlessly integrating risk,budgeting, financial accounting and reporting data andprocesses.

However, credit unions today require more than just reportingtools if they want to grow. They need more complete information,delivered in a way that ties the past and present to the future.Member-focused behavioral analytics can be used to model andpredict member behavior and buying propensities, enabling thecredit union to identify and execute on growth plans throughspecific member treatment strategies. A credit union must also beable to model and simulate the credit union's projected growth sothat management can adapt to changes to its balance sheet, profitstructure and the underlying risks.

An integrated ASP solution that marries budget planning,financial accounting, risk management and reporting tools shouldgenerate full balance-sheet and income statement projections, alongwith comprehensive risk management analysis for more accurate andefficient budget planning and execution.

The changing financial services industry is shaping the ongoingconvergence of the crucial functions of risk, budgeting, planning,reporting and accounting. Credit unions, like all financialinstitutions, are experiencing this. As a result of recent advancesin cloud technology, credit unions can now seamlessly integraterisk management, budgeting analysis and reporting management toolsfor better modeling, forecasting and monitoring that willfacilitate the achievement of institutional goals.

Credit unions that embrace cloud technology will have the toolsto ensure and improve compliance, grow their revenue and membershipbase, and be better-positioned to control performance from acentral vantage point – to better weather market volatility andharness emerging opportunities.

Danny Baker is vicepresident, Product Management, Risk & Compliance, for Fiserv Inc. in Brookfield, Wis.

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