Bank failures have significant consequences on the economy, impacting financial stability, consumer confidence, and the overall business environment. To mitigate these risks, banks, regulators, and businesses need efficient and effective ways to monitor financial health and identify potential threats. With the recent failure of Silicon Valley Bank, the junk rating of First Republic Bank, and the Credit Suisse fiasco, organizations must improve visibility into their upstream financial provider risk management practices.
Low-code technology has emerged as a powerful tool to monitor, detect, and manage risk of all types. This technology allows businesses to quickly create sophisticated risk management applications with minimal coding. By leveraging this technology, businesses can easily deploy apps to aggregate complex data sets, analyze them in effective dashboards, and net actionable intelligence.
The Current Banking Crisis
Although still developing, the 2023 banking crisis has already caused significant disruption in the global markets. The concepts of systemic risk, depositor guarantees, and the role of regulators has all been brought to the forefront. As the segment continues to tumble and uncertainly looms over the battle of depositor security versus inflationary pressures, businesses must be prepared to monitor the financial health of their banking partners, suppliers, and customers.
As seen in the rapid decline and subsequent collapse of Silicon Valley Bank (SVB), businesses of all sizes faced liquidity challenges, ultimately caused by a bank run that exceeded the bank’s capacity to meet its urgent depositors’ needs. This incident highlighted the need for improved upstream risk management practices; risk signals were present but were missed by many depositors due to a lack of visibility.
Data metrics coming from any of the following:
play a crucial role in assessing the financial health of banks. However, these traditional metrics can sometimes fail to capture the full picture of a bank’s financial stability, as we’ve seen with Moody’s delayed downgrade of Signature Bank. They may be slow to react to emerging risks or may not account for specific vulnerabilities within a bank’s operations. As a result, businesses must adopt a more proactive data-driven approach to monitoring their financial providers and assessing potential threats.
Leveraging Low-Code Technology for Risk Management
TrackVia’s low-code technology platform can be used to build customized risk management applications that not only track traditional financial metrics but also integrate additional data points, such as news articles, social media sentiment, and economic indicators. This comprehensive approach allows businesses to have a more accurate and up-to-date view of their financial providers’ risk profiles.
Key Benefits of Low-Code Technology in Monitoring Bank Failures
Speed and Agility:
Low-code platforms enable rapid application development, allowing businesses to create and deploy risk management solutions quickly. As a result, organizations can respond more swiftly to emerging risks and potential bank failures.
Customization:
Businesses can tailor low-code applications to meet their specific needs, incorporating industry-specific metrics, thresholds, and data sources to create a comprehensive risk management system.
Ease of Use:
With minimal coding required, low-code technology is accessible to a wider range of users, including those without a technical background. This empowers more team members to contribute to risk management efforts, resulting in a more robust and efficient process.
Scalability:
Low-code platforms are highly scalable, allowing businesses to accommodate growth, change, and new requirements as they arise. This adaptability is crucial in a constantly evolving financial landscape. TrackVia can store and aggregate tens of millions of data points and display the results on any internet-connected computer or mobile device.
Integration:
TrackVia’s low-code technology can easily integrate with existing systems and data sources, ensuring a seamless flow of information across an organization’s risk management infrastructure.
Implementing Low-Code Solutions for Bank Failure Monitoring
To start utilizing low-code technology for monitoring bank failures, businesses should follow these steps:
Identify Key Metrics and Data Sources:
Determine the most relevant financial health indicators, news sources, and economic indicators for your business, and identify reliable data sources for each. In our sample app below, we will be using the FDIC’s BankFind Suite to seed our TrackVia app with the details of every financial institution in the United States.
Build the Low-Code Application:
Use TrackVia’s low-code platform to create a custom risk management application, incorporating the identified metrics and data sources.
Establish Alerts and Thresholds:
Set up automated alerts and thresholds to notify relevant stakeholders when potential risks emerge or when certain conditions are met. In TrackVia, automatic email notifications can be configured, dashboards can be updated in real-time, and custom reports can be generated.
Integrate with Existing Systems:
Ensure the low-code application integrates with your current risk management infrastructure and processes. TrackVia via Workato integrates to thousands of enterprise applications including SAP, Oracle, and NetSuite.
Monitor and Refine:
Continuously monitor the application’s performance and adjust as needed to improve accuracy and effectiveness.
Downloading FDIC Data & Starting Our TrackVia Trial
Now that we’ve gone through the conceptual steps to set up a risk management application using low-code technology, let’s walk through the practical process of downloading FDIC data, importing it into a new TrackVia app, and building out the application. This process should take about 15 minutes, even if you’re not a coder.
Start a TrackVia Trial:
The first step is to start a free TrackVia trial. This will allow you to create a new account and build the application. With TrackVia, we can either start from scratch or import our existing Excel spreadsheets. Since the FDIC provides institutional data in CSV format, we’ll opt for the ladder.
Download FDIC Data and Import into TrackVia:
Next, we’ll download the FDIC’s Institutions list via BankFind Suite. This open source dataset includes all the information we need to start, including basic data on banks, their assets under management, and other information.
Once we have the FDIC data, we’ll import it into TrackVia. We first clean up the columns in Excel, since not all the data is useful, and rename some columns so that it’s easier to keep track of the key data points. TrackVia provides a simple, intuitive user interface that allows us to quickly map the data fields from the FDIC dataset to our application fields.
Build the Application:
With our FDIC data imported, we can begin building out the application. A new dashboard is automatically created upon a successful Excel import, so we can build from that. To start, create a new form to manage financial institutions and a handful of views and charts to display the institutions in an easy-to-digest format.
Integrate Our FDIC Data:
At this stage, we have a list of every active financial institution in the US, alongside their key financial details. Now, we need to use that underlying data to assess our own financial risk. In practice, we will create a new TrackVia table that will store our own bank accounts, their balances, and associations with institutions. We will also add conditional formatting to see immediately which institutions hold our deposits exceeding FDIC insurance limits.
When these tables, views, and charts are combined, we are left with a colorful dashboard showing our bank balances and subsequent exposure.
As a next step, we recommend continuing to build out your TrackVia app to handle additional risk management tasks, such as:
– Creating an alert when your organizations’ bank balance exceeds FDIC coverage at any given institutions.
– Inviting your coworkers to TrackVia to collaborate on monthly, quarterly, or annual risk assessments.
– Integrating your enterprise applications with TrackVia via Workato, such as SAP, Oracle, and Salesforce. Use Workato to scrape social media, integrate with AI technologies for sentiment analysis, and more.
– Exploring TrackVia’s developer ecosystem to bring advanced logic, business rules, and other real-time data sources into your apps. Use TrackVia Microservices to integrate Moody’s and S&P reports, real-time deposit information, and parse SEC reports.
Low-Code Offers an Effective Solution
Low-code technology, such as TrackVia, offers an effective solution to monitor and manage the risk of bank failures. By leveraging this technology, businesses can quickly build and deploy risk management applications tailored to their specific needs, enabling them to track traditional financial metrics and integrate additional data sources for a comprehensive view of their financial providers’ risk profiles.
Implementing a low-code solution not only improves visibility into the financial health of banks, but also empowers businesses to proactively respond to emerging risks and potential bank failures. With an intuitive user interface, scalability, and seamless integration with existing systems, low-code technology is an invaluable tool for businesses looking to navigate the unpredictable economic future.
Request a demo to get a better idea of how this or other applications can help streamline your business.
