IMPLEMENTING PORTFOLIO ANALYSIS

There's a lot more to meaningful, useful portfolio analysis than just plugging some data into a software program.

The quest for the right analytical tools to help you find the "ALLL/Capital sweet spot" and optimize your risk management system has many twists and turns.

You probably already know some of the obvious challenges, many of them discussed elsewhere in this section: choosing software platforms and analysis models, training your staff, linking analysis results to strategies and practices, and so on.

But unless you have been through it yourself, you may not realize the magnitude of the challenge of collecting the kinds of data inputs that will produce meaningful analysis results.

My team has years of experience with these analysis models, and we can help you create a "warehouse" of data that can be used to give you powerful insights into your risk future. We'll help you wrestle with issues like:

• The details that are needed for each individual loan in the portfolio. The most sophisticated, and powerful, analysis models require information loan by loan, not just an aggregate number.
• Determining how often you "slice" the data, the timing of the snapshots you take of the portfolio.
• Additional information to be used for breakdowns by location, department, type of credit, and so on.
• Translating your language around credit and individual transactions into the properties your analysis program uses as input. This can, in fact, be quite a complex topic.

The value of the information you generate through portfolio analysis is highly dependent on the quality of the information you feed into it. Getting the "front end" right is crucial to reaping the risk management benefits of sophisticated analysis models.

Many banks adopt a complex analysis program, only to discover that they have a surprising number of issues to wrestle with around data collection, data quality, data completeness. Save yourself some time! My team has the experience to guide you through these issues to achieve more meaningful analysis results, more quickly.

Contact me for help in working your way through the necessary decisions to bring effective analysis for optimal risk management to your bank.