New Feature: Advanced Analytics

May 13, 2016 Jim Young

More information, more quickly, to give lenders more options when making a deal.

That’s the goal of the new Advanced Analytics feature we recently released.

With access to Advanced Analytics lenders will be able to instantly see:

  • Profitability sensitivity to Rate, Spread, and Line of Credit (LOC) Expected Usage
  • Credit Risk sensitivity for Risk Rating and Collateral Value
  • Exportable Amortization data for custom analysis, including breakdowns of the balance changes and capital

What’s That Look Like In Action?

Let’s assume you’re trying to figure out what adjustments you need to make to a line of credit to make sure it hits your Return on Equity (ROE) target. In this example, it’s a $100,000 LOC, with an expected utilization of 45% and a 0.5% annual fee on unused portion of the LOC.

You input those numbers and the Profitability Wizard tells you you’re 36bps below your Target ROE. Now, with Advanced Analytics one click gives you this visual feedback.

Utilization Sensitivity

The LOC Utilization Sensitivity chart shows the ROE for the range from 0% to 100% utilization and where the ROE is on that line based on the current loan details. Now we can quickly see where the deal would need to be, in terms of predicted utilization, to make sense for the bank. Or, if the predicted utilization falls short – as in this example – we can now explore whether the fee on the unused portion can be raised to meet the ROE target.

That’s just one of the multiple ways in which Advanced Analytics can quickly give your lenders the information they need to fine-tune their deals.

For an even-more in-depth look at Advanced Analytics, check out this post on our support site.


Editor’s Note: In the past we’ve used the PrecisionLender blog purely as a place to discuss banking issues and trends. That will still be the case for the vast majority of our posts, but we’re also going to sprinkle in occasional updates about changes and upgrades we’re making to our software. These posts will be tagged as “Product” posts, a label you can see next to the date of each post, under the title. You can also access other product blogs by clicking on “Product” under Blog Categories on the right side of the page.

The post New Feature: Advanced Analytics appeared first on PrecisionLender.


About the Author

Jim Young

Jim Young, Director of Content at PrecisionLender, is an award-winning writer with experience in a range of positions in media and marketing, from reporter to website editor to content marketer. Throughout his career Jim has focused on the story – how to find it, how to understand it, and how best to share it with others. At PrecisionLender, he manages the many ways in which the company shares its philosophy on banking and the power of relationships. Jim graduated Phi Beta Kappa from Duke University and holds a masters degree in journalism from Columbia University.

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