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Risk Management Experts Help Lenders Better Balance and Leverage Their Portfolios

Too many companies in the financial services industry have trouble coming to terms with risk, and any such failure can be truly costly. Risk is inherent in every lending activity and many related ones, so it must always be accounted for and managed accurately and effectively. Experts like Kirk Chewning help lenders and other financial services businesses do a better job of managing their own risks, a type of progress that is inevitably some of the most important of all.

Better Assessing and Managing the Risk Present in Any Loan Portfolio

Even businesses with hundreds of millions of dollars in their loan portfolios often do a fairly poor job of accurately assessing the associated risks. Unfortunately, that can easily engender dangers of existential types and scales, with some companies going under specifically for such reasons.

In many more cases, getting a better handle on risk will mean being able to simply plan and act with more confidence and effectiveness. When the risk represented by a particular loan portfolio has been more precisely defined and detailed, businesses can respond in ways including:

  • Securitizing loans. Many financial services companies regularly package at least some of their loans into securities that can be sold to investors. Doing so requires delving deeply enough into the associated details to satisfy both regulators and those who might be interested in the resulting securities. A thorough, accurate assessment of risk throughout a portfolio will make it much easier to figure out the best way to proceed with such plans in each and every case. That can open up entirely new opportunities and make it much simpler to profit from activities that were already in the pipeline.
  • Adjusting portfolio composition. Some loan portfolios end up presenting excessive risk simply because of unintended structural imbalance. Regardless of the lending standards and credit modeling programs in place, the everyday loan origination activities of particular companies can contribute to such problems. Assessing the present level and types of risk in a portfolio will make it easier to take appropriate corrective measures.

Lending and Serving Clients with More Confidence

Arriving at a better understanding of risk can open up possibilities like these and others. Working with a consultant who is able to provide the necessary insights can be one of the most productive moves of all.