Catalyst News

What If Online: Find Out (Quickly) How Changes Will Affect Your Balance Sheet

by Catalyst Corporate | Mar 31, 2020

Sudden changes in the economy likely have credit unions considering the impact on their balance sheets and adjustments that need to be made. Catalyst Strategic Solutions has an online balance sheet modeling service – called What If Online – that helps credit unions generate instant results for this type of ALM analysis.

Using current credit union risk reports, the What If Online service enables credit unions to run a variety of simulations to gauge the financial impact of different scenarios.

For example, what if your credit union offered a mortgage special to attract refinancing activity? Introduced a deposit deal? Or purchased a loan participation? Although the model may not capture every scenario in an environment of extreme volatility, knowing in advance how changes could affect the balance sheet supports the decision-making process.

To satisfy regulatory requirements surrounding interest rate risk, credit unions are required to conduct “what if” scenarios before they enter new lines of business or materially alter the balance sheet structure, according to Aaron Martini, Director of ALM Services for Catalyst Strategic Solutions. “Credit unions can perform this in-house, dipping their toes into an idea before changing strategies,” Martini added. This instant analysis is designed to make the process easier and is available at no additional charge to clients signed up with Catalyst’s recurring ALM services.

Using What If Online is simple. Credit unions log into TranZact, select the ALM section and then the What If model. From there, they can pull up a range of asset and liability types they wish to model from a drop-down menu. A built-in self-check feature ensures What If Online generates results only if the assets and liabilities balance. After a scenario is complete, credit unions may print and/or save a file as a PDF. Of course, if credit unions run into a complex scenario and need assistance, Catalyst Strategic Solutions ALM analysts are available to assist them.

“We want to empower credit unions by giving them the tools to run these scenarios in-house, in seconds,” said Mark DeBree, Managing Principal for Catalyst Strategic Solutions. “If you’re in a management, board or ALCO meeting and you want to see how a potential move will impact your balance sheet, you can use this service to run iterations on the fly without needing an analyst to run a scenario for you.”

DeBree encourages clients to experiment with this tool to discover the different insights it can bring to their balance sheet. “By creating a solution that credit unions can use on their own, whenever they need it, we’re trying to empower financial managers to do more sensitivity testing. This knowledge enables them to make better business decisions.”

For a demo on the What If Online tool or more information on Catalyst Strategic Solutions ALM Services, contact us today.