RiskTech Forum

Fiserv: ALM - Manage Your Interest Rate Risk From the Bottom Up

Posted: 20 March 2017  |  Source: Fiserv


As a credit union leader, you’ll have to agree that interest rates are dynamic and can have a lasting and intense impact on financial institutions. With the possibility of such impactful effects, the days are gone when credit union executives can plan by the seat of their pants. The risk is too great, and the results vary too much based on different scenarios that may occur. Along with the management team, the National Credit Union Administration (NCUA) requires that directors of the credit union understand the risks found in depository institutions, including interest rate risk.

Today’s technology enables credit unions to more accurately and effectively manage interest rate risk using a combination of asset and liability management (ALM) software and effective business practices.

This paper will help credit union executives test their readiness for an ALM solution, select the most valuable features of ALM software, and then use it correctly to help effectively manage, mitigate and control interest rate risk. After reading this paper, you will also have a number of practical ideas to assist in evaluating your risk exposure as well as potentially increase your income. Most important, you will understand the critical need for a cohesive strategy to plan for the inevitable rise in interest rates.

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