Article June 17, 2025 The Missing Link in ALM: Connecting Risk Data to Derivatives Decision-Making Explore how banks and credit unions can eliminate siloed risk data and integrate hedging programs directly into core systems and reporting tools. Chris Renaud Chief Technology Officer Banks and credit unions today don’t lack risk data—they lack risk data where they need it. Interest rate hedges, valuation models, and hedge accounting results often live in isolated systems or spreadsheets, managed by a handful of internal experts. Meanwhile, finance, treasury, and regulatory reporting teams scramble to pull the latest numbers from emails, file shares, or vendor portals. It’s operationally inefficient, error-prone, and unsustainable. The solution isn’t just more tools—it’s connected tools. And that starts by bringing hedging into the core. The Cost of Siloed Risk Data When risk and hedging information live outside core banking systems, the consequences ripple across the institution: Delayed financial reporting due to manual consolidation Inconsistent assumptions across Treasury and Finance teams Regulatory friction during audits or call report preparation Underutilized hedges because of unclear visibility into performance This fragmentation limits the value of your hedging program and slows strategic decisions. Why Integration Matters Now As community and regional banks grow in complexity—adding derivatives, structured funding, and sophisticated loan strategies—the case for operational integration grows stronger. At Derivative Path, we’re working with banks and credit unions to integrate: Trade data and valuations directly into general ledger systems Exposure and hedge effectiveness metrics into ALM and budget tools APIs that push real-time information to internal dashboards or data lakes Automated reporting for hedge accounting and compliance audits The result is a seamless flow of information that reduces rework, improves accuracy, and accelerates time-to-decision. From Stand-Alone to System-Agnostic Modern banks need flexibility—not just in how data is accessed, but in how it integrates into existing workflows. That’s why our platform is built API-first, enabling institutions to: Export hedge data directly into internal systems Schedule data delivery in preferred formats (e.g., flat file, API, SFTP) Connect seamlessly with data warehouses, reporting platforms, and audit tools Enhance existing platforms like Salesforce or internal dashboards by embedding hedge data inline—without requiring users to switch systems Maintain data security and control without vendor lock-in Whether you’re running Jack Henry, Fiserv, Q2, Salesforce, or a custom environment, the goal is the same: make risk data accessible within the tools your teams already use, minimizing disruption and maximizing adoption. What Integration Unlocks Once hedge data is embedded into core workflows, banks can: Automate accruals, valuations, and journal entries Monitor risk in near real-time across the balance sheet Deliver unified reports to ALCO, finance, and auditors Free up internal resources to focus on strategy, not formatting The integration journey starts with small wins—like automating a journal entry—and scales into transformative results across the enterprise. Conclusion: A Connected Bank Is a Competitive Bank In a world where milliseconds matter in trading and days matter in reporting, disconnected systems are no longer acceptable. Banks and credit unions that bring hedging into the core of their operations will manage risk more effectively, operate more efficiently, and report more confidently. The tools exist. The integrations are ready. The next move is yours.
