Risk & Compliance Analytics Documentation

Version 1.0 | TBE Consulting | Data Visuals

Overview

The Risk & Compliance Analytics platform is a comprehensive monitoring and analysis solution designed specifically for credit unions. It provides real-time visibility into regulatory compliance, risk metrics, and potential issues requiring management attention.

The platform integrates data from your core banking system, transaction monitoring systems, and regulatory reporting tools to provide a unified view of your institution's risk profile.

Key Features

Dashboard

The main dashboard provides at-a-glance visibility into critical risk and compliance metrics:

• Real-time Metrics: BSA/AML compliance, capital ratios, delinquency rates, and CAMEL ratings
• Trend Analysis: 12-month historical views of key regulatory metrics
• Portfolio Risk: Delinquency and charge-off rates by product category
• Fraud Detection: Monthly fraud losses and prevention metrics
• Active Alerts: Filterable table of all risk alerts with severity levels

Executive Summary

A comprehensive narrative report designed for board presentations and executive review:

• Overall risk assessment and CAMEL rating analysis
• Critical alerts requiring immediate attention
• Risk category analysis (credit, concentration, operational, compliance)
• Fraud detection and prevention summary
• Strategic recommendations with prioritized action items
• PDF export capability for board packages

AI Agent

Conversational interface for natural language querying of risk and compliance data:

• Ask questions in plain English about any risk or compliance metric
• Get instant explanations of CAMEL ratings, alerts, and regulatory requirements
• Suggested questions to guide exploration
• Context-aware responses based on current data

Metrics & Indicators

BSA/AML Compliance Score

Percentage of transaction monitoring rules that are current and actively functioning. Calculated based on:

• Currency Transaction Report (CTR) filing accuracy
• Suspicious Activity Report (SAR) filing timeliness
• Customer due diligence completion rates
• Sanctions screening effectiveness

Benchmark: 95%+ is considered excellent; 90-95% is satisfactory; below 90% requires attention.

Net Worth Ratio

Total equity divided by total assets, expressed as a percentage. This is the primary measure of capital adequacy for credit unions.

Regulatory Requirements:

• Well Capitalized: ≥7%
• Adequately Capitalized: 6-7%
• Undercapitalized: <6%

Delinquency Rate

Total loans 60+ days past due divided by total loan portfolio, expressed as a percentage.

Industry Benchmarks:

• Excellent: <0.5%
• Satisfactory: 0.5-1.0%
• Elevated: 1.0-2.0%
• Concerning: >2.0%

Loan-to-Share Ratio

Total loans divided by total member shares (deposits), expressed as a percentage. Measures liquidity and lending capacity.

Optimal Range: 70-80% balances member service with liquidity management.

Concentration Risk Score

Composite metric evaluating portfolio concentration across:

• Product type (auto, mortgage, business, etc.)
• Member concentration (large borrowers)
• Geographic concentration
• Industry concentration (for business lending)

Scale: 0-100, where higher scores indicate greater concentration risk. Scores above 80 warrant enhanced monitoring.

Risk Alert System

Alert Severity Levels

High Severity: Issues requiring immediate management attention, potential regulatory implications, or significant financial exposure. Examples:

• BSA/AML red flags requiring SAR consideration
• Approaching regulatory filing deadlines
• Capital ratio falling below well-capitalized threshold
• Significant fraud losses or patterns

Medium Severity: Issues requiring timely review but not immediate crisis response. Examples:

• Elevated delinquency trends in specific portfolios
• Concentration limits being approached
• Minor compliance gaps identified in internal audits

Low Severity: Information items or issues that have been resolved but remain in the system for documentation. Examples:

• Resolved operational risk incidents
• Informational regulatory updates
• Completed action items

Alert Status Categories

• Action Required: Awaiting management decision or response
• Under Review: Being investigated by risk or compliance team
• Monitoring: Identified but not yet requiring intervention
• Resolved: Addressed and closed, retained for record-keeping

CAMEL Ratings Explained

The CAMEL rating system is used by the NCUA to assess credit union safety and soundness. Each component is rated on a scale of 1-5:

• 1 - Strong: Performance substantially exceeds minimum expectations
• 2 - Satisfactory: Performance meets minimum expectations
• 3 - Fair: Performance below expectations; weaknesses present
• 4 - Marginal: Serious weaknesses; regulatory concern
• 5 - Unsatisfactory: Critical weaknesses; immediate corrective action required

CAMEL Components

Capital Adequacy (C): Evaluates the level and quality of capital, ability to absorb losses, and capital planning processes.

Asset Quality (A): Assesses loan portfolio quality, concentrations, underwriting standards, and loan loss reserves.

Management (M): Evaluates board and management oversight, strategic planning, risk management, and internal controls.

Earnings (E): Analyzes earnings performance, sustainability, and trends including net interest margin and ROA.

Liquidity (L): Assesses ability to meet obligations, funding sources, and asset-liability management.

Sensitivity to Market Risk (S): Evaluates interest rate risk, investment portfolio risk, and ALM practices.

Data Integration

Data Sources

The platform integrates data from multiple systems:

• Core Banking System: Account balances, loan data, member demographics
• Transaction Monitoring: BSA/AML alerts, suspicious activity flags
• Call Report System: Regulatory financial data (5300 reports)
• Loan Servicing: Delinquency tracking, payment history
• Fraud Detection: Fraud cases, prevention metrics, trends

Data Update Frequency

• Real-time: BSA/AML alerts, fraud detection flags
• Daily: Delinquency rates, portfolio balances
• Weekly: Trend analysis, comparative metrics
• Monthly: CAMEL ratings, comprehensive risk assessments

API Endpoints

The platform exposes RESTful API endpoints for data access:

• /api/compliance-metrics - Current compliance scores
• /api/regulatory-trends - 12-month trend data
• /api/risk-alerts - Active alerts list
• /api/portfolio-risk - Portfolio risk breakdown
• /api/camel-ratings - CAMEL component ratings
• /api/fraud-detection - Fraud metrics and trends
• /api/chat - AI agent query endpoint

Best Practices

Daily Monitoring

• Review alert banner on dashboard for any high-priority items
• Check BSA/AML compliance score for any significant drops
• Scan active alerts table for new items requiring attention

Weekly Review

• Analyze portfolio risk trends for emerging patterns
• Review fraud detection metrics and adjust rules as needed
• Update alert statuses for items under investigation

Monthly Board Reporting

• Generate Executive Summary report
• Export to PDF for board package inclusion
• Prepare management responses to any critical alerts
• Review CAMEL rating components and address any downgrades

Quarterly Planning

• Conduct comprehensive risk assessment review
• Update concentration risk policies if needed
• Review and adjust fraud prevention rules
• Prepare Call Report 5300 submissions

Technical Specifications

Technology Stack

• Backend: Python 3.9+ with Flask framework
• Frontend: HTML5, CSS3, JavaScript (ES6+)
• Visualization: Chart.js 4.4.0
• API: RESTful JSON endpoints

Browser Requirements

• Chrome 90+ (recommended)
• Firefox 88+
• Safari 14+
• Edge 90+

Security Features

• Role-based access control (RBAC)
• Encrypted data transmission (TLS 1.3)
• Audit logging of all data access
• Session timeout after 30 minutes of inactivity
• Multi-factor authentication support

Performance

• Dashboard load time: <2 seconds
• API response time: <500ms (95th percentile)
• Support for up to 500 concurrent users
• Data retention: 7 years of historical metrics

Support & Resources

Getting Help

For technical support or questions about the platform:

• Email: [email protected]
• Phone: Available in your client portal
• Documentation: This page and online knowledge base

Training Resources

• Platform orientation webinar (monthly)
• Video tutorials for each major feature
• Best practices guide for risk committees
• Sample board reporting templates

Customization Options

The platform can be customized to meet your specific needs:

• Custom alert thresholds and rules
• Additional data source integrations
• Branded executive summary templates
• Custom metrics and KPIs
• Automated report scheduling and distribution

Version History

• Version 1.0 (Current): Initial release with core risk and compliance monitoring features

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Risk & Compliance Analytics
Developed by TBE Consulting