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Risk Management System for Credit Unions

Overview

Credit Unions in Ireland were going through a reducing loan book in 2017 and that’s when they decided to come up with a new product for a loan management system for the lending market with a longer-term product was Mortgage.

CLIENT
CUDA

SERVICES
Consulting, Implementation & Software Development

PRODUCTS

INDUSTRY
Distribution

Challenges

In 2013, Ireland was going through the major financial downturn of the 21st Century, same as most of the economies of the rest of the world. Credit Unions were also facing a similar situation, and a number of them went through some difficult times. It became important to manage the risk in Credit Unions properly, that’s when CUDA came in and with the help of TI successfully managed it.

Risk Management as a Manual Process

Before CUSP Risk Management was rolled out, Risk Management was either non-existent in Credit Unions or for more forward-thinking Credit Unions, it was a manual process.  This was not only time-consuming but error-prone as well.

Inconsistent Risk Management Systems in Credit Unions

Every credit union was using a different method/process to manage and store risk, and it made the life of auditors and regulators difficult. They had to go through a different process every time to check and ensure that every credit union was compliant with the required changes.

Inconsistent Risk Library & Control Library

Every time a credit union went through a Risk Management exercise, they had to develop their own Risk Library and Control Library. Not all risks were applicable to everyone. That’s why the system had to be adaptable to every credit union’s requirements.

Solutions

Target Integration had developed a Credit Union Support Platform (CUSP) for CUDA. CUSP had all the information on Credit Unions processes like learning & Communication, Operational Processes etc.

Risk & Control Library

A full risk library and equivalent control library was implemented in the Risk Management System for Credit Unions. The library allowed all the credit unions to take advantage of the central research and development by CUDA and to make sure they were following the guidelines specified by the Central Bank of Ireland.

Define Your Own Risk Profile & Risk Appetite

Every credit union is now able to define their own Risk Profile and Risk Appetite. A Risk Profile includes the list of risks applicable to that particular Credit Union. Once it has been defined, they can now use these risks to define the relevant controls and the performance of the controls.

Track your Risk Register/Risk Assessment

The performance of each of the controls applicable to a particular risk is stored in the Risk Management System as a Risk Assessment. The performance is reviewed on a periodic basis, and the system provides a full history of the improvements made by the Credit Union over a period of time.

Result

Target Integration delivered a system within budget and on time. The system is now available from Credit Union Development Association (CUDA) for Credit Unions. Since its launch in 2013, 30+ Credit Unions are using the Risk Management System.

While other associations have a limited number of value-added services for their members, CUDA has become the leader in providing support services and systems provider to its members. This has increased member retention and development.

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