America First Credit Union: Scaling model risk management
America First Credit Union (AFCU) is the sixth-largest credit union in the United States with a total of $12 billion in capital assets. The credit union prioritizes customer retention by offering lifelong banking services including high yield savings accounts, mortgages, car loans, and credit cards. AFCU operates in multiple states and has approximately one million members in Utah, Idaho, Oregon, and New Mexico.
AFCU utilizes a wide array of models for applications such as credit scoring, loan approval, and capital planning. While these models are generally developed in-house, AFCU relies on external consultants for their periodic validation.
As Model Risk Management (MRM) activities began to expand, and given the diversity of model validation approaches, AFCU encountered several challenges in effectively managing and measuring their aggregate exposure to model risk. The fragmentation of model risk processes hindered team collaboration, and resulted in inefficient back-and-forth dialogues between model development and validation teams. Moreover, the absence of a centralized platform to consolidate all model-related information further limited visibility for AFCU shareholders regarding model risks across different departments, causing projects and audits to be delayed. This led America First to realize the need for an intuitive technology solution that provides a streamlined and centralized approach to MRM.
The implementation of Chiron Enterprise was easy and secure. The collaboration and communication with Finn and Jonathan from the Customer Success team was also seamless.
MRM Analyst at America First Credit Union
After careful consideration and extensive market research, AFCU selected the Yields MRM platform to elevate their MRM practice. AFCU capitalized on the platform’s modularity, initially focusing on the implementation of the solution’s ‘Model Catalog’ and ‘Workflow Engine’ modules. While the Model Catalog enables AFCU to inventorize all models and trace all metadata and model events, the Workflow Engine orchestrates the execution of any business processes. With the task & alert functionalities, teams work together towards the common objective of delivering quality throughput in a timely manner.
Scalability and flexibility were crucial factors in AFCU’s decision-making process, as models are increasingly integrated across various business units within the organization. Being able to configure the solution in a no-code manner and dynamically adapt the solution in accordance with evolving internal and external requirements perfectly addressed these criteria. The business team takes full ownership of the solution, eliminating the need to rely on the internal IT team or Yields’ customer success team for modifications or configurations.
Being able to provide enterprise-wide access to the solution has transformed the way model risk management is conducted within AFCU. The high level of flexibility of the platform not only allows controlled access for users, but also ultimately enables AFCU to embed standardization in the way model information is collected and in how business processes are executed. This helps to minimize the risk of inconsistency due to the heterogeneity of validation approaches, and also allows model risk management to be scaled across more models and business units. By streamlining business processes with sign-offs and a full audit trail, and providing a centralized platform where model development and model validation teams can collaborate, Yields.io has empowered America First to proactively manage model risks, enhance compliance, and improve overall operational efficiency.
The implementation was meticulously planned and executed within weeks. The Yields.io Customer Success Team collaborated closely with the credit union in setting up user roles and permissions, and in establishing workflows for model validation and monitoring. Now the first users are up and running with the solution, AFCU plans to expand its usage and onboard additional users from various departments.