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3 reasons to check out Accolade's new Loan Advisory service

How Accolade's new Loan Advisory service works for you

Like our other services, Accolade’s Loan Advisory is turnkey. Plus:

  • There is no software to purchase or run. 
  • Each month we load the data from your core into our models and provide you reporting packets with write ups and excel files with loan-level details.
  • We customize each data extraction so there is no need for expensive coding from your core system to output the data. Send us the raw data, and we will map it for you.
  • Our platform is built on loan-level detail. We project default probability and loss severity for each loan so you can have confidence in your loss projections. You will also be able to manage risk and improve profitability in ways that were not previously possible.

Learn more at AccoladeAdvisory.com

November 30, 2015 -- Making the switch from portfolio-based historical loss models to forward-looking, loan-level analytics and reporting is on the horizon due to changes in the calculation of ALLL by the Financial Accounting Standards Board (FASB) and the National Credit Union Administration (NCUA).

These changes will transform credit-risk management from a reactive, reduce-loan-loss impact approach to a more proactive, preventative approach. As you know, loans make up a significant portion of credit union balance sheets both large and small. Here are three reasons why having a loan advisory service is important and why you should check out Accolade’s.

Reason 1: Loans can be significant sources of income and potential losses.

Growing your portfolio while not taking on excess risk can be a challenge, especially if you don’t have the analytical tools to report on and evaluate your loan portfolio. 

Reason 2: Quantifying the credit risk in your loan portfolio is more important than ever as financial institutions compete for loan balances.

Additionally, current proposed changes in accounting rules would force all credit unions to forecast loss allowances based on a forward-looking analytical model instead of the historical charge-off models used today.

Reason 3: You can save time and manage better.

Our loan risk analysis and reporting service will not only save you time and allow you to better manage your loan portfolio, but it will also bring you “accolades” (pun intended) with your board and examiners.

Now that we have reviewed some of the reasons you should consider a loan advisory service, let’s look at some of the actual outputs you would receive with our new service.

Sample reports

From summary level reporting for management (shown in the chart on the right), to individual loan details, we have you covered. You can see loan counts, balances, coupon and many other data points for the entire portfolio or almost any subset of the portfolio.

We also provide a reconciliation of your portfolio changes month over month. This next sample chart shows how much in month over month changes were due to paydowns, closed loans, and added loans.  We provide loan-level model outputs in a spreadsheet so you can see what specific loans dropped compared to ones that were added and what the risk profile of each group was. Are the loans being added of a similar risk-reward profile as the ones rolling off? This tool will show you the migration of your portfolio.

Powerful analytics

We map your loan data to our national database of loans and run regression models to predict loan losses. These models go well beyond standard FICO score models and use many other borrow, collateral and economic data points to determine the probability of default and loss severity of each loan.  Check out the chart below to see the migration of reserves, risk grade, default probability and loss severity over time.

 

Detailed drill down

Since the model is loan level, we can drill down to slice and dice the data virtually any way you want to see it. Summarize reports by portfolio or drill down to a branch or loan officer. You can even see individual loans with our spreadsheet outputs.

Historical data

Our model stores all historical data points so we can look at things like FICO, valuation or delinquency migration over time. Not only does this provide insight into the portfolio, but it also teaches the model about the borrower behavior for your members. The chart below shows examples of detailed delinquency trends.

Ready, set, go

Powerful, insightful, detailed loan analytics are not just for the largest institutions. With Accolade, you can have access, too. These four samples are the tip of the iceberg, revealing just a few of the things our loan analytics engine can do for you.

Contact Accolade for a free demo