Sageworks Bank & Credit Union Exam Survey
With the increased use of analytic technologies and the ever-expanding pool of data financial institutions are able to access, more organizations are able to leverage insight into how they might perform in the event of certain economic challenges or market shifts. This process, known as stress testing, helps institutions better understand any particular vulnerabilities and better mitigate their exposure to risk.
Large banks have been federally required to perform such testing at certain intervals for some time, under the Federal Reserve’s Comprehensive Capital Analysis and Review (CCAR) and the 2010 Dodd-Frank Act. But as analytic technology has advanced and become more accessible, more institutions are being urged to begin stress testing and are realizing the advantages.
According to The Sageworks Bank & Credit Union Exam Survey, which includes insight from representatives of 180 financial institutions with total assets ranging from $75 million to $500 million, many small- to mid-size banks and credit unions are now stress testing to ensure the security of their portfolios. The survey revealed that 43 percent of institutions said they are already stress testing, and one-third said examiners pressured them to start or expand stress testing practices.
“The big banks perform a different version of stress testing, but that doesn’t preclude smaller banks from the practice,” Sageworks Senior Risk Management Consultant Robert Ashbaugh said in a press release. “In working with clients, we have found that these smaller institutions — especially those with sizable CRE portfolios — are being asked to do something.”
The ability for risk management professionals to perform these types of simulations helps to increase both preparedness and agility while also helping create action plans to address any potential organizational challenges before they arise. DataView360 provides risk personnel with the tools required to effectively perform ‘what if’ simulations that uncover new opportunities, grant better insight into the performance of your organization and helps protect against the risks associated with sub-standard credit risk management.
With more competitors than ever strengthening their offerings through the use of stress testing, you don’t want to be left behind. Contact GDS Link today for all your data aggregation and portfolio management needs.