Using Data to Drive Intelligent Risk Management

Risk management is top of mind for CUs. Source: Shutterstock

As credit unions continue their data maturity journey and strive to become more data-centric organizations, a key area of business that is often left un-transformed is risk management. Instead of using institution-specific data to augment risk management strategies, credit unions all too often rely solely on qualitative past experiences or industry trends. A credit union can develop more secure processes and do more to protect its systems from cyber threats by using data generated through its interactions with the outside world.

New database and relationship mapping technologies, which are readily applied in operational and strategic analysis, can be used to improve and optimize a credit union’s risk profile. Data-driven risk mitigation strategies can deliver dynamic and effective risk postures that increase the soundness of the credit union without introducing friction into member experiences. As lines of business that focus on remote interaction continue to become more business critical, data and analytics will play a critical role in the development of more advanced risk management strategies. This is necessary to protect the institution’s increasing number of access points. Data plays a part in five major arcs of the risk management story: