Risk Modeling

Risk modeling is the assessment of the probability of unfavorable market conditions and the potential impact those conditions may have on a financial portfolio. Risk modeling helps predict not only the performance of investments, loans, or liability portfolios during challenging times, but also predicts the magnitude of the effects of unfavorable market swings and loan delinquencies.

How will QuantyPhi help your credit union?

Our risk strategy experts are highly skilled in developing risk models unique to credit unions and can help train you in how to better manage your risk. Our high-powered data analysis systems can process varying risk scenarios, allowing credit union leaders time to react to unexpected losses with wise, goal-aligned decision-making. 

What are the benefits of risk modeling?

Risk modeling is about measuring the amount of risk inherent in certain instruments. Credit unions that practice risk modeling are better prepared to handle potential losses created by delinquent loans held by members and potential losses resulting from negative fluctuations in portfolio market value. Monitoring risk and its potential impact is key to preparing for potential downturns in portfolio value. 

Risk modeling provides credit union leaders with guidelines for risk exposure. Scheduled, periodic risk review against a model offers CEOs and CFOs a better understanding of their credit union’s risk profile. It gives them the insight they need to create unique balance sheet portfolios that can withstand potential challenges. Risk modeling provides hypothetical scenarios, which are then used to strategize and optimize.