CUNA News
  • LOG IN
  • Create Account
  • Sign Out
  • My Account
  • LOG IN
  • Create Account
  • Sign Out
  • My Account
  • Topics
    • Community Service
    • Compliance
    • Credit Union Hero
    • Credit Union Rock Star
    • Credit Union System
    • Directors
    • Human Resources
    • Leadership
    • Lending
    • Marketing
    • Operations
    • Policy & Issues
    • Sales & Service
    • Technology
  • Credit Union Magazine
    • Buyers' Guide
    • COVID-19
    • Digital Edition
    • Credit Union Hero
    • Credit Union Rock Star
    • Subscribe
    • Advertise
    • Contact
  • Advertise
  • Awards
    • Nominate Credit Union Hero
    • Nominate Credit Union Rock Star
  • Podcasts
  • Videos
  • Jobs
  • Contact

News

Home » ‘What could go wrong?’
Operations Subscribers

‘What could go wrong?’

Understanding the enterprise risk management process.

February 22, 2022
Ron Jooss
No Comments
Tony Ferris
Tony Ferris, founder/CEO of Rochdale, says ERM, puts a framework around risk and the opportunities it presents.

A true advocate to his discipline, it’s easy for Tony Ferris to apply enterprise risk management (ERM) principles to everyday life.

“Think about driving to the store: What could go wrong?” says Ferris, founder/CEO of Rochdale, which specializes in ERM, strategic planning, governance, lending support, and consulting for financial institutions. “You get a flat tire, you get in an accident, you forget to take your wallet. Whether you’re running a small business or financial institution, you face all types of risks.

“The difference is we usually consider those risks in our head, or through a less-formal process,” he says. “Risk management brings that to a discipline we can advance our proficiency and effectiveness at running our businesses.”

To help credit unions formalize that process, NCUA has identified seven areas of risk credit unions must manage: credit, interest rate, liquidity, transaction, strategic, reputation, and compliance.

While not every credit union has a formal ERM initiative, Ferris recommends putting a framework in place and building it out as the organization gains an understanding of its risk environment. 

“It allows you to level set as an organization, align your priorities, and work through opportunities that exist,” he says.

While small credit unions have fewer resources than their larger counterparts, they can formalize their risk management process, Ferris says.

‘ERM is simply a prioritization tool that says, ‘Here are the biggest things we need to worry about; where do I put my time and money?’
Tony Ferris

“ERM is simply a prioritization tool that says, ‘Here are the biggest things we need to worry about; where do I put my time and money?’” he says. “So if I know the biggest risk I face and the dollar impact of that, I can put my money where it is absolutely needed.”

As for the current risk environment, Ferris says credit unions are learning to cope with the pandemic. “There was nothing that came out of the pandemic that was new: human resource issues, retaining talent, the move to digital were all there before. It just got accelerated rapidly.”

One development that will affect the credit unions’ strategic performance is a reduction in nonsufficient funds fees, he notes.

Credit Union Enterprise Risk Management designation

Credit Union Enterprise Risk Management designation

Cybersecurity is also an ever-evolving issue. 

“The question is how to keep up,” Ferris says. “There's no doubt the bad actors will continue to perform their magic on us, and we have to be ever diligent. That’s why we have to develop as much understanding about the risks as possible.”

He says that understanding is the key to ERM effectiveness.

“From a framework standpoint, you partner with each area of risk within your organization so you're giving and getting information, and it’s all baked into your program and considered on the same scale,” Ferris says. “It's not piecemeal, so you have a comprehensive view of what's going on in the organization.”

Resources

  • CUNA ERM Certification School
  • CUNA Compliance & Risk Council Conference
  • CUNA Cybersecurity Conference with NASCUS

KEYWORDS ERM risk management

Post a comment to this article

Report Abusive Comment

Credit Union Magazine: Winter 2022

Winter 2022

Credit Union Magazine’s Winter 2022 issue highlights data-driven marketing, the board’s role in cybersecurity, elder abuse scams, credit unions’ auto lending advantage, and more.
Digital Edition •  Subscribe

Trending

  • House passes CUNA, League-led board modernization bill

  • CFPB issues CUNA-opposed proposal on credit card late fees

  • Key committee leaders supportive of credit union priorities

Tweets by CUNA_News

Polls

Vote for the 2023 CU Hero of the Year

View Results
More

Champion for the Credit Union Movement

Credit Union National Association is the most influential financial services trade association and the only national association that advocates on behalf of all of America's credit unions. We work tirelessly to protect your best interests in Washington and all 50 states. We fuel your professional growth at every level and champion the credit union story at every turn.

More CUNA

  • Membership
  • Contact Us
  • Careers

Resources for

  • Credit Union Advocates
  • Leagues
  • Press
  • Providers

Our Affiliates

  • American Association of Credit Union Leagues (AACUL)
  • Credit Union Awareness
  • Credit Union House
  • CUNA Strategic Services
  • National Credit Union Foundation
GET CUNA UPDATES
© 2023 Credit Union National Association | ADA Compliance Notice & Legal
Email Us