Key Portfolio Management Strategies for Community Banks

This guide outlines five key portfolio management strategies specifically designed for community banks and credit unions. It emphasizes the importance of regular portfolio reviews as part of a compliant credit risk program, highlighting how these reviews have evolved from basic credit score refreshes to more comprehensive analyses that account for changing consumer behaviors and market conditions. The document details objectives that lenders can achieve through robust portfolio management, such as understanding overall portfolio health, identifying financially stressed borrowers, managing existing credit lines, detecting hidden fraud risks, and informing future strategy changes. Additionally, it presents best practices for effective portfolio management, including maximizing the value of reviews, ensuring data freshness, taking timely actions, and recognizing when inaction may be appropriate. The guide also discusses the types of data available for portfolio management, including traditional and alternative credit risk scores, fraud risk scores, and trended attributes, which collectively enable lenders to gain a holistic view of consumer credit and identity risk profiles.