What are the benefits of using a third-party, like QuantyPhi, for ALM Validation?

QuantyPhi offers: Independent, expert analysis Customized recommendations for your unique balance sheet Support for regulatory exams Enhanced use of risk management software for credit unions

What does an ALM Validation typically include?

QuantyPhi’s ALM Validation service includes: Review of credit union governance and ALM policies Interest rate risk and liquidity risk assessments Validation of model inputs, assumptions, and outputs Evaluation of credit union liability management strategies Compliance checks with NCUA and industry best practices Both are essential components of a robust ALM for credit unions strategy.

ALM Validation

Overview

Asset-Liability Management (ALM) validations assure credit union CEOs, CFOs, ALCO and board members, and other credit union leaders that interest rate risk measurement processes accurately display the risk exposures of their credit union. It enables them to identify gaps in which ALM measurement and reporting may not fully capture true risk, and further ensures compliance with NCUA and other financial institution regulations.

Does your credit union need an ALM Validation?

Read the Whitepaper

QuantyPhi's whitepaper presents various scenarios of when your credit union would benefit from an independent, third-party ALM validation, and explains the specific benefits of partnering with a balance sheet CUSO to obtain one.

Each of QuantyPhi's ALM validations are unique based on your balance sheet, parameters set forth in your ALM or interest rate risk policies, and methods of assumption setting and results reporting. During the validation, our highly trained team will review your credit union’s ALM program, pinpoint areas that are not currently optimized for overall peak performance, suggest methods and practices to help improve your credit union’s ALM process, and help you implement any desired changes.

QuantyPhi’s goal is to help you evaluate the IRR on your balance sheet and provide you with insights on how to improve your credit union’s performance and pass your exams with ease and confidence.

Our asset liability experts will review critical areas of interest rate risk measurement and management, including:

ALM program governance and controls
Interest Rate Risk and ALM policy review
Model input and balancing procedures
Data extraction, import, and reconciliation procedures
Investment portfolio validation
Model results validation (NEV/NII/other)
ALM assumptions review
Compliance with regulations, policies, and best practices
Other credit union specific needs based on preliminary review

Key Benefits

Enhanced Performance: Optimize your credit union’s IRR process for peak efficiency with expert analysis.
Targeted Improvement: Identify specific areas for improvement in asset liability management for better outcomes.
Expert Guidance: Receive actionable recommendations from highly-trained analysts using advanced technology.
Seamless Implementation: Get support in implementing desired changes for lasting improvements.

Frequently Asked Questions

Asset Liability Management (ALM) for credit unions is a strategic financial process that aligns assets and liabilities to manage interest rate risk, liquidity, and capital adequacy. It plays a critical role in maintaining credit union financial health and supporting long-term credit union strategic planning.

ALM Modeling involves building and running simulations to forecast financial outcomes.

ALM Validation is the process of reviewing and verifying those models to ensure accuracy, compliance, and effectiveness.

ALM Validation ensures your credit union ALM model is accurate, compliant, and effective. It provides an independent review of your risk modeling process, helping you meet regulatory expectations and improve your net worth ratio—a key indicator of credit union financial health.

By validating your ALM process, you gain insights that directly inform strategic planning—from lending and investment decisions to capital planning and risk mitigation. This ensures your credit union remains agile and resilient in changing market conditions.

Best practices recommend conducting an ALM Validation every one to two years, or more frequently if your balance sheet, market conditions, or regulatory environment changes significantly.

The credit union net worth ratio (or net worth ratio credit union) is a measure of capital strength. A validated ALM Modeling process helps ensure this ratio is accurately managed, supporting regulatory compliance and long-term sustainability.

QuantyPhi offers:

Independent, expert analysis
Customized recommendations for your unique balance sheet
Support for regulatory exams
Enhanced use of risk management software for credit unions

Strong credit union governance includes oversight of financial risk management. ALM Validation ensures your board and management team have reliable data and insights to make informed decisions.

QuantyPhi offers ALM training for credit unions, including workshops and one-on-one sessions. These programs help staff and board members understand ALM concepts, regulatory expectations, and how to use ALM results in strategic planning.

QuantyPhi’s ALM Validation service includes:

Review of credit union governance and ALM policies
Interest rate risk and liquidity risk assessments
Validation of model inputs, assumptions, and outputs
Evaluation of credit union liability management strategies
Compliance checks with NCUA and industry best practices

Both are essential components of a robust ALM for credit unions strategy.

QuantyPhi combines deep industry expertise with advanced modeling tools to deliver personalized, actionable insights. Each validation is customized based on your policies, assumptions, and reporting methods, ensuring relevance and effectiveness.