This article will focus on the Top Management Reporting Software for Credit Unions.
Different Types of Reporting – At first, this article was going to be about the top Reporting software for Credit Unions. I then realized that there are many different types of reporting needs for Credit Unions that tools will need to focus upon.
Regulatory Reporting covers reporting for the NCUA and SEC. The NCUA has a battery of specific templates that need to be filled out each quarter that result in the Call Report. The SEC also has its own set of disclosures that need to be tagged with XBRL technology. The tagging has to conform to a quasi SEC chart of accounts that crosses all industries for comparability.
There also a slew of reports that cover risk management. They are designed to review such things as the risk of cyber-attack and what defensive measures has the Credit Union taken to mitigate it. The reports need to address what is the Credit Union doing about fraud, robberies, foreclosures, and anything else that may be a threat to its operations.
There are reporting tools that focus on Asset Liability Management. The focus here is how well balanced are the various portfolios when it comes to interest rate maturities. For example, if the bank has $100 million dollars in loans that are about to reprice for the next nine months, does it also have a $100 million in offsetting deposits that can that can support those loans at a profitable interest rate spread?
All those tools are necessary to run a Credit Union. But if you want to improve performance, you will need to invest in a good management reporting solution.
Key Features of Management Reporting – When it comes to management reporting for Credit Unions, the focus should be on measures that the individual employees can actually have an impact on.
New Checking Accounts – When I was growing up in the banking business, I was always told that if you got the customer’s checking account and got them to use it, they would consider you to be their bank. That is why there are so many gimmicks from banks on getting a customer to use their account.
Home Equity Loans Originated – Opening a home equity loan is considered golden for a banker. It is secured by a very safe asset. The proceeds can be used for virtually anything such as buying a car to paying off credit cards. Getting that Home Equity Loan from a customer is a gateway to many other products that will increase your bank’s share of wallet.
Interest Rate Exceptions – Net Interest Margin is the biggest source of revenues for banks. If you have bankers that are pricing loans below the price sheet, they better have a good reason. Conversely, if you have bankers giving away CD rates higher than the recommended rates, they need to be able to back up their decision. Measuring rate exceptions on a daily basis can protect the bank’s net interest margin from collapsing.
Monitor Service Charge Waivers – We have all been there. A customer comes into the lobby mad as fire complaining that they have been charged a Non-Sufficient Funds Fee and they want it waived immediately. Not wanting to cause a scene, you quickly waive the fee. It turns out that the customer has no other balances with the bank and they are constantly overdrawing their funds.
Member Profitability – Without member profitability, how will you ever know which members need to be charged full price and which ones can have a fee waived. Knowing your customer’s profitability is crucial to making profitable decisions.
Comparisons to Goals – There are many goals that bankers need to achieve each year in order for the Credit Union as a whole to meet its objectives. Individual bankers need to know where they stand on their loan and deposit growth goals. They need to know where they stand on expense management.
Finding the Right Solution – When it comes to finding the top management reporting software for Credit Unions, the solution needs to meet certain criteria. At a minimum, the tool must have access to the following modules.
General Ledger – The general ledger holds the basic financials of a Credit Union. It is typically detailed down to the branch level. It will measure such things as loan and deposit growth, expense compared to plan, and other basic measures.
Loans – The loan module will supply loan production, interest rates, fees (as well as waivers). The nice thing about the loan module as that performance can be traced down to individuals within the Credit Union in addition to the branch level. This allows goals to be set at the employee level.
Deposits – The deposit module will supply checking account production, interest rates, service charges (as well as waivers), and activities such as teller items and electronic banking items. Again, individual tracking and goal setting can be achieved.
Customer Relationship Management (CRM)/Member Profitability – Having access to these modules is crucial to effective management reporting for Credit Unions. You need to know what accounts belong to each individual that you front line is interacting with as well as that member’s profitability.
Funds Transfer Pricing/Activity Based Costing – There needs to be some methodology for allocating funds transfer pricing rates to your various loan and deposit instruments. The Credit Union needs to be able to allocate costs for various activities at those same instruments. These two pieces are vital to the bank’s ability to calculate member profitability.
Budgeting/Forecasting – Being able to track all the various elements that go into good performance is not enough. You need to be able to establish goals and standards for each measure as well as customize those goals by branch and individual.
Top Management Reporting Software for Credit Unions – So that is a lot of stuff on your shopping list for a good management reporting tool for Credit Unions. The tool needs to be able to report against all of your various modules of data as well as be able to set and track goals. Below are some of the industry standard solutions.
SAP BusinessObjects – BusinessObjects (acquired by SAP in 2007) provides performance management, planning, reporting, query and analysis, and enterprise information management.
Oracle Business Intelligence Enterprise Edition – OBIEE (comprised of Siebel Systems and Hyperion Solutions that were both purchased by Oracle) delivers reporting, ad-hoc query and analysis, OLAP, dashboard, and scorecard functionality with a rich end-user experience that includes visualization, collaboration, alerts, and more.
IBM Cognos – Cognos (acquired by IBM in 2009) provides a toolset for reporting, analysis, scorecarding, and monitoring of events and metrics. The software consists of several components to meet the different information requirements in a company.
BI360 from Solver is a complete Business Intelligence (BI) and Corporate Performance Management (CPM) suite with reporting, budgeting and dashboard modules. The BI360 suite also offers a data warehouse to combine your data sources and to empower all business users with self-service analytics critical to fast and efficient decision-making. It is offered both on premise and in the cloud.
All four of are very scalable. They are optimized for very fast summary reporting with the ability to drill down to the most detailed level of data. For the most part, reports can be designed with an Excel add-in and viewed in both Excel and a web portal. Some of the solutions typically take months before you see any valuable results while a solution like BI360 can in certain cases be up and running in just a couple of weeks.
If you are interested in improving Credit Union performance, you need to invest in the top management reporting software for Credit Unions you can afford. The competition is investing them right now and you do not want to be left behind servicing unprofitable members that nobody else wants!