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Strategizing for Success in 2024: A Comprehensive Checklist for Financial Institutions

Posted on January 2, 2024 Published by

As we step into the new year, financial institutions face a landscape influenced by the intersection of rising interest rates and amplified regulatory scrutiny. This juncture demands a proactive approach in preparing for the challenges and opportunities that lie ahead. To assist in navigating these complexities, here is a comprehensive checklist aimed at positioning your organization for a successful 2024.

Strategizing for Success in 2024: A Comprehensive Checklist for Financial Institutions

 

Review the Credit Portfolio

A critical aspect of preparing for the year is evaluating the credit portfolio. This involves a thorough assessment of various elements:

  • Risk Profile Evaluation: Conduct an in-depth analysis to understand the risk profile of your credit portfolio comprehensively.
  • Concentration Risk: Ensure concentration risk remains within acceptable limits to avoid overexposure to specific sectors or borrowers.
  • Risk Mitigation Strategies: Review and update existing risk mitigation strategies to align them with current market dynamics.
  • Risk Rating Migration: Compare current risk ratings with previous assessments and make necessary adjustments.
  • Stress Testing: Perform stress tests to gauge resilience and prepare for adverse economic scenarios that could impact credit exposures.

Review and Update Policies and Procedures

Aligning policies and procedures with current market conditions and regulatory requirements is critical to success:

  • Credit Policy Alignment: Ensure the credit policy reflects the latest market conditions and complies with regulatory standards.
  • Efficiency and Compliance: Review the credit approval process for efficiency and compliance. Clearly define and adhere to credit approval authority levels.
  • Monitoring Systems and Tools: Assess the effectiveness of credit monitoring systems and tools. Confirm regular monitoring of credit exposures and efficient functioning of early warning systems.
  • Collateral Monitoring: Ensure that collateral monitoring and management procedures are aligned with current real estate trends.

Develop Your Team

Your financial institution’s success is intrinsically tied to the skills and knowledge of your team members:

  • Team Evaluation: Assess the current team’s skill set and consider any necessary adjustments.
  • Opportunities for Growth: Offer opportunities for team members to excel in different areas or consider hiring new talent.
  • Training and Education: Train or retrain staff on updated policies, procedures, and industry trends. Keep them abreast of regulatory changes.

Plan Annual Reviews and Take Action on Prior Findings

Strategic planning and review processes are crucial for ongoing success:

  • Loan Portfolio Strategic Review: Strategize annual review targets and conduct a comprehensive assessment of the loan portfolio.
  • Annual Loan Review Plan: Develop a plan focusing on areas posing higher risks due to economic or market changes.
  • Independent Loan Reviews: Ensure regular and independent loan reviews, addressing findings from previous reviews effectively.

Remember, you are not alone on this journey. Seek guidance and assistance whenever needed to navigate these complexities effectively.

Wishing you a prosperous and successful 2024! Should you have any questions or require further assistance, do not hesitate to reach out. Together, let’s make 2024 a year of achievements and resilience for your organization.

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“The staff at Enlighten have been available for questions, in addition to the engaged work that they do. They've been very helpful as a resource beyond the major audit.”
— Meghann Kasper, Chief Credit Officer, Bank First
“Enlighten gives us a very good second set of eyes on our transactions. They're not afraid to challenge us on some of the work that we've done, which is what is needed. I don't need to pay somebody to tell me I'm good, I need to pay somebody to tell me where I've made mistakes.”
— Robert McPherson, VP of Risk Management, Peoples State Bank
“Enlighten provided industry best practices that weren’t going to show up in an audit report. They would say, ‘Hey, I noticed you do this. This is really unique, you do a really great job of it.’ And then they might add, ‘Some other clients that I have are doing something like this.’”
— Bill Beardsley, President, Michigan Business Connection
“By questioning some of our methodologies, Enlighten has helped us say, ‘Okay, this is where we need to train staff better and focus on so that they understand what they're doing better.”
— Robert McPherson, VP of Risk Management, Peoples State Bank
“The organization of the communication — before, during, and after the reporting process — was certainly better with Enlighten than what I've experienced with a lot of auditors.”
— Bill Beardsley, President, Michigan Business Connection
“The staff at Enlighten have been available for questions, in addition to the engaged work that they do. They've been very helpful as a resource beyond the major audit.”
— Meghann Kasper, Chief Credit Officer, Bank First
“Enlighten gives us a very good second set of eyes on our transactions. They're not afraid to challenge us on some of the work that we've done, which is what is needed. I don't need to pay somebody to tell me I'm good, I need to pay somebody to tell me where I've made mistakes.”
— Robert McPherson, VP of Risk Management, Peoples State Bank
“Enlighten provided industry best practices that weren’t going to show up in an audit report. They would say, ‘Hey, I noticed you do this. This is really unique, you do a really great job of it.’ And then they might add, ‘Some other clients that I have are doing something like this.’”
— Bill Beardsley, President, Michigan Business Connection
“By questioning some of our methodologies, Enlighten has helped us say, ‘Okay, this is where we need to train staff better and focus on so that they understand what they're doing better.”
— Robert McPherson, VP of Risk Management, Peoples State Bank
“The organization of the communication — before, during, and after the reporting process — was certainly better with Enlighten than what I've experienced with a lot of auditors."
— Bill Beardsley, President, Michigan Business Connection