The economic environment and industry challenges facing community financial institutions mean that managing risk and driving growth are imperative for banks and credit unions, industry experts say. As a result, credit risk management is vital, and credit analysts play a critical role in the success of their financial institutions’ credit risk functions.
Loan review and credit risk Consultant Ancin Cooley recently led two Abrigo webinars, “Best Practices for Credit Analysts at Banks” and “CU Best Practices for Credit Analysts,” and he says that a strong credit analyst is extremely valuable. A strong credit analyst is one who is not only proficient in the routine skills related to determining the creditworthiness of applicants and preparing reports for management review and regulatory reporting. It is someone who also possesses certain soft skills that allow them to serve an important control function in the financial institution. Their talent that goes beyond intellect plays an important role in managing credit risk.
Cooley likens bankers and those in loan production to the gas pedal on an automobile, and credit analysts to the brake. “You cannot go forward if you don’t have the gas,” Cooley said during the webinar with banks. “And you cannot drive earnings and interest income if you do not have loan officers that are out there beating the pavement, doing a good job and building relationships.”
“At the same time, if you have strong loan officers without compensating controls in the form of strong and talented credit analysts, you will go off the road, you will run into something,” said Cooley, a former OCC examiner who also provides strategic planning and risk appetite consulting through his firms, Synergy Bank Consulting and Synergy Credit Union Consulting. “There’s value in both functions.”
Credit analysts who are most beneficial to a bank or credit union have four core qualities that set them apart – both in their usefulness to the bank and in their own careers, Cooley said. These four traits are:
- Emotional intelligence