More than ever, community banks need cutting-edge data management
The most vital component of analyzing and reporting on commercial loan portfolios is access to quality data. The harsh reality is that 80% of the time is spent gathering and organizing data, not actually analyzing it. What causes this unbalanced and inefficient state of data management in banking? A typical scenario looks something like this:
- The bank has a core system for storing data relevant to risk assessment, stress tests, loan payments and balances.
- There are key data points not stored in a centralized place but are found in individual appraisals or loan reviews.
- Stored valuation data is often incorrect or dated, resulting in wildly inaccurate reports — like showing a loan that has a 2,300% LTV.
- The bank has to pull data into a spreadsheet and manually manipulate key points to run concentration reports and stress tests.
- The bank needs to isolate or highlight certain data but the automated reporting system doesn’t allow for this customization.
- The latest economic data brings up questions about risk from regulators and directors that can’t be answered with current reports and processes.
- The true analysis is time-consuming and slow-moving due to being conducted in a set of spreadsheets. A large portion of time is allocated strictly to data quality.
Community Banks Are Flying Blind
Many bankers say they feel as though they are “flying blind,” or simply reacting to issues. They don’t have the answers that they need to crucial questions, such as:
- What are the subcategories of [concentration] within a list of loans and which ones are most at risk?
- What 5 loans in [location] are at the most risk right now?
- If interest rates increase, what 10 loans have the most exposure in my portfolio?
- If NOI drops in [industry], what loans are likely to be impacted and how much of my capital is potentially exposed?
Data Management in Banking: There’s Got to Be a Better Way
Qualtik revolutionizes data management in community banking and CRE portfolio management by using technology to speed up the process. The system allows for sophisticated reporting that grows with banks and meets regulatory requirements. Using Qualtik’s interactive dashboards and analysis tools,…