Modern ALCOs, Outdated Tools: Fixing the Spreadsheet Problem in Derivatives Strategy

For most banks and credit unions, the Asset-Liability Committee (ALCO) is the nerve center for strategic balance sheet decisions. It’s where hedging, rate risk, capital, and earnings come together—on paper. But what if the very paper (or spreadsheet) guiding those discussions is hiding critical blind spots? 

The reality is this: while ALCOs are expected to act with precision, most are working with tools built for a different era. Spreadsheets remain the dominant medium for evaluating hedging strategies, hedging exposures, and projecting balance sheet outcomes. And they’re not keeping up. 

The Risks of a Spreadsheet-Centric ALCO 

Banks and credit unions face an increasingly dynamic environment—rate volatility, deposit migration, funding pressures, and regulatory scrutiny are all intensifying. Yet many institutions still rely on manually updated Excel models that: 

• Lack real-time market data 
• Depend on a handful of internal experts 
• Don’t scale across business units or products 
• Offer limited scenario modeling or sensitivity analysis

This isn’t just inefficient. It’s risky. 

Inaccurate or delayed exposure visibility can lead to: 

• Missed hedging opportunities
• Under- or over-hedging that impacts NIM
• Gaps in compliance documentation and audit readiness   

For ALCOs tasked with precision, this level of friction is a liability. 

Why Banks and Credit Unions Need Real-Time ALM Insights 

The strategic role of the ALCO is only growing, and leadership teams need faster, clearer answers. 

This is where purpose-built dashboards come in. 

At Derivative Path, we’re building an ALM Dashboard designed specifically for regional and community banks, as well as credit unions. This solution will give financial institutions: 

• Real-time visibility into rate exposures and hedge positions 
• Scenario analysis to test prospective hedge strategies in different rate environments 
• Audit-ready documentation for hedge accounting and ALCO governance 
• Tailored views for Treasury, Finance, Risk, and the Executive Team 

This isn’t a replacement for your existing ALM model. It’s a complement—a dynamic layer that empowers better decisions, faster. 

The ALCO Conversation Is Changing 

Across our client base, we’re seeing a shift in how institutions approach the ALCO conversation: 

• More institutions are seeking board-level visuals of balance sheet sensitivity.
• CFOs and Controllers want self-service access to hedging data, not just monthly reports.  
• Treasury teams need to communicate risk in a way that resonates with non-technical stakeholders. 

A modern ALM dashboard bridges the language gap between Finance, Risk, and Strategy. 

Conclusion: The New Standard for Balance Sheet Strategy 

Banking is changing, and ALCO meetings must evolve with it. Spreadsheets won’t disappear overnight, but they can no longer be the single source of truth. 

Institutions that invest in real-time, dashboard-driven balance sheet intelligence will operate with greater agility, better governance, and a more informed leadership team. 

The gap is real—but it’s solvable.