The Challenge: Running ALM Model is Time Consuming
Glass City Federal Credit Union, with about $235 million in assets and between 24,000 and 25,000 members, faced a challenge that is common among smaller but growing credit unions.
Glass City Federal, located in Maumee, Ohio, a suburb of Toledo (aka “Glass City” for the glass manufacturers there), had neither the manpower nor the ability to continue dedicating time and resources to properly maintain an asset-liability management (ALM) model in-house. Executive Vice President David Kramb, who had been using Abrigo’s FARIN Foresight ALM model software to run the ALM model himself since the 1990s, recalls the eye-opening experience of attending a training session with other bank and credit union executives running ALM models at institutions. “You’ve got a bank in the room that might have two or three people attending this training and one person, their entire job is data manipulation within the model, while another person’s job was strictly running different scenarios, forecasting,” he said. “Here I am, a $225 to $235 million credit union, you have me doing all of that, plus all of the other duties.”
Kramb loved the muscle behind FARIN Foresight. Because he viewed the model as being so powerful, he wanted to make sure that he was using the model to its highest capacity and incorporating the right assumptions that Glass City Federal needed, without having the expertise of best practices on-hand.