SITUATION
For over 80 years, Louisiana Federal Credit Union (LFCU) has been the go-to destination for money-saving solutions. Boasting a $420-million-asset portfolio, they have helped 36,000 members save over $7.1 million dollars. The credit union prioritizes local business growth, assisting over 700 businesses in Louisiana and offering support to over 30 organizations, charities, and events every year.
LFCU recognized the importance of being prepared for potential challenges and set a goal of implementing a comprehensive risk management program. While their procedures may remain stable, the environment in which they operate is constantly evolving. To stay ahead of emerging risks, they sought the expertise of a knowledgeable organization both in regard to the credit union industry and in risk management. The goal was for the consulting partner to work directly with LFCU’s team to better understand what to look for in the ever-changing landscape of potential threats.
Additionally, the recent challenges workplaces face following the COVID-19 pandemic warranted the need for additional risk mitigation. This task would address various concerns, such as maintaining a robust workforce, navigating remote work, coordinating teams across different locations, and ensuring a safe return to the office. Ultimately, adapting to this new reality required a flexible and proactive approach to risk management.
SOLUTION
LFCU partnered with Rochdale in 2013 to create an enterprise risk management model. Rochdale’s professional advisory services and risk management software (apogee iQ) helps LFCU not only identify risk but calculate the residual risk, considering the probability of something happening and the mitigation measures in place. The quantitative model is backed by numerous real-life examples from Rochdale working with multiple credit unions of all asset sizes all across the country. Thanks to Rochdale’s help and ongoing educational resources, the process of building and maintaining the model was and is incredibly efficient.
To educate the LFCU team, Rochdale held collaborative meetings with staff, managers, and executives to understand their objectives and their daily processes. LFCU also stays in-the-know through Rochdale’s cutting-edge newsletters that highlight emerging risks in the industry. These newsletters are designed to equip organizations with a solid starting point for mitigating risk. Rochdale also helps determine quantitative risk for each of those areas, ensuring that they’re always prepared for whatever might come.
“We don’t have to invent the wheel every single time, especially when you have a new emerging risk. We know Rochdale will build that into their model, and we can customize it in the manner to meet our needs or can add our own if we wanted to,” says Melissa Matherne, CFO for Louisiana Federal Credit Union.
RESULTS
Upon utilization, the credit union can now easily identify their risks and evaluate potential exposure. By analyzing the mitigating factors in place, they can not only effectively manage and minimize threats, but identify areas of new opportunity. But the risks of the pandemic and the constantly evolving market still linger. As a result, Rochdale is constantly assisting in evaluating and mitigating potential turmoil in the work environment.
Staying informed is key to navigating uncertain times, and Rochdale is committed to providing the resources necessary to do so. Based on risk assessments, LFCU made the decision to shift to a remote/hybrid work model with the exception of branch personnel. They also took timely action to review their policies and procedures, allowing for necessary changes to occur. With the aim of creating a modern working environment that reflects the current times, reviews were meticulously conducted to ensure that policies were updated, practical, and relevant. This move is one that demonstrates the credit union’s commitment to growth, success, and the wellbeing of their employees and members alike through the utilization of Rochdale’s risk methodology and software suite.
“If you don’t foresee what could be coming, you could be in a much worse position down the road, because you didn’t properly plan for the potential of those risks. It really is a planning tool to be sure you’re navigating correctly,” says Matherne.
The relevant content Rochdale provides through blogs, newsletters, emerging risk reports, and quarterly economic risk articles is like a crystal ball that helps LFCU stay ahead of the game and make data-driven decisions. Rochdale also creates handy reports that highlight the Top 10 residual risks and their potential impact on the financial and profitability fronts. Using this information, LFCU can measure these risks against their capital and decide if they are too risk averse, just right, or need to pull back a little. This tool empowers leadership to make smart decisions related to future management and responsibilities, ensuring financial stability and long-term relevance.
LFCU knows the importance of due diligence in their highly regulated industry. The game-changing investment in a second Rochdale software module dedicated to product risk assessments (the ORM module) allows them to identify and mitigate risks efficiently and effectively surrounding various process and product-related decisions. Although some may question the time and resources invested in risk management – due to the fact that you are forecasting risks that may not ever come to fruition – LFCU knows that being prepared for any potential hazard is invaluable.