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Industry Insights

Featuring thoughts and analysis from some of the brightest minds in the banking world and beyond, Industry Insights is a collection of short, easy-to-digest articles touching on some of the most pressing strategic issues facing your institution.

September 23, 2019
Balance Sheet Optimization
By: Alla Gil, Founder and CEO – Straterix

Balance sheet optimization has been the Holy Grail of companies’ management for many years now. But to quote Fintekminds on the topic, “A lot has been tried and written on the subject, but very few have been able to achieve meaningful results.”

There were attempts to treat institutions’ (and corporate) balance sheets as portfolios of assets, with balance sheet optimization reduced to traditional investment portfolio optimization in a Markowitz mean-variance framework. It works by finding the best expected return (mean) on portfolio assets for each level of risk (defined as portfolio variance).

September 9, 2019
The Importance of Portfolio Duration
By Robert Segal, CEO, Atlantic Capital Strategies, Inc.

Following a recent meeting in Washington, the Federal Reserve lowered the target range for the Fed Funds rate to 2% to 2.25%. The central bank also stopped reducing the size of its balance sheet two months earlier than expected.

August 26, 2019
Applying Profitability Through Cube Analysis
By Ben Braun, Associate Director of Finance, Associated Bank

Vendors and institutions alike talk about the value that profitability analysis can bring to an organization. Generally, this comes with a price tag associated with implementing proper costing techniques, funds transfer pricing assumptions and other reporting needs. But what an institution really needs to know prior to committing is:

What are some creative ways the organization can utilize the information to add value?

August 12, 2019
Breaking Down the Silos in Managing Risk
By Michael Berman, Founder and CEO, Ncontracts

There’s a difference between risk management that starts at the top and risk management that trickles up.

When risk management starts at the top it is thorough and unified. Risk tolerances and risk appetite drive strategic decisions – all decisions. Everyone is following the same approach. In contrast, when risk management trickles up, it’s anyone’s guess what’s really happening. Each business line, department or area does what it wants, how it wants, with no regard for the big picture. It’s a huge waste of resources that creates redundancies, inefficiencies and discrepancies.

July 22, 2019
CECL: Overcoming Key Challenges
By Nick Ansley, Partner, Financial Institutions Practice, Wipfli LLP

Financial institutions are facing a number of significant issues as they prepare to adopt the new Current Expected Credit Losses (CECL) impairment model. As implementation deadlines begin bearing down, it may be helpful to review three of the common challenges banks and credit unions are wrestling with and to consider a few ideas for working through these challenges.

July 8, 2019
Enterprise Risk Management for the Boardroom
By L. Randy Marsicano, NCRM, CRISC, Professional Services Senior Manager, WolfPAC Solutions

Have you ever felt challenged while preparing for an ERM program presentation? Ever had one go badly?

Enterprise Risk Management, by definition, is a process itself, so the reporting of your program’s results by default is also considered a process.

June 17, 2019
CECL Status Check: How Prepared is Your Financial Institution?
By Rick Martin, Product Manager, Financial & Risk Management Solutions, Fiserv

It’s already clear that the effect of CECL – the Financial Accounting Standards Board’s (FASB) Current Expected Credit Loss standard – will be far-reaching. The CECL accounting standard, which requires banks and credit unions to record expected losses whenever they make a new loan (at the time of origination or purchase), is scheduled to go into effect as follows:

Have a topic you want to share? 

We’d love to hear from you:
Mark Loehrke
Editor and Director, Publications and Research
Direct: 312-630-3421
Email: mloehrke@FMSinc.org