Blog

How Credit Unions Can Use Contract Software to Manage Compliance and Risk 

businessman with laptop and floating images
By Sean Heck

2 minutes

Leverage graphical dashboards, artificial intelligence and OFAC tools to your advantage. 

Costly compliance issues and risk variables are on the rise for credit unions and can get in the way of meeting strategic goals. Luckily, in the age of digital transformation, credit unions can plan for risk and track compliance using contract management software

Risk Challenges Faced By Credit Unions 

Credit unions can face significant risks, including internal fraud, credit risk, noncompliance, transactional risk, lending risks and data breaches.  

Noncompliance risk can come in many forms, including the risk of failing to comply with state and federal laws, loan agreements, and rules and regulations put forth by the National Credit Union Administration compliance and the Consumer Financial Protection Bureau.   

With such potential for risk exposure, credit unions benefit from leaving behind antiquated and error-prone risk management methods in favor of more a centralized, automated and streamlined tool that promotes valuable risk management insights and opportunity realization. A tightknit risk response plan supported by contract management software can be the way to go. With this tool in place, manually auditing and reporting compliance and regulations with tools such as spreadsheets and emails can be a thing of the past.  

Credit Union Risk Management Software 

Leading contract lifecycle management software can function as a risk management software platform for credit unions. 

To more holistically manage risk, credit unions can leverage contract lifecycle management software to comprehensively assess various risk variables at a glance with engaging, graphically mapped risk variables. For example, credit unions can use CLM software to create a visually pleasing graph that plots contracts, transaction-related documents and loan documents based on their identified “risk score.” Such a graph is a great tool to use to support centralized risk analysis and oversee appropriate risk management decisions. 

Credit unions also can look to leverage artificial intelligence-based contract management software to analyze hypothetical risk variables and exposure. This can help them prepare for the unpredictable and be proactive about managing risk. 

Credit unions can further boost their risk management effort using an Office of Foreign Asset Control search risk mitigation tool within their contract management software. Such a tool can help identify whether entities to which credit unions are providing loans, as well as employees, vendors and suppliers are on OFAC’s national sanctions list. 

Credit unions can also configure rules in their contract management software to notify their teams—in real-time, before the problem gets bigger—if an entity meets or exceeds a configured OFAC search percentage. 

CLM features are very relevant to credit union compliance. The aforementioned reporting capabilities can help credit unions easily demonstrate proof of compliance in various areas. Digital transformation for credit unions calls for an embrace of robust and centralized compliance management with contract management software. 

Sean Heck is content marketing manager at CUES Supplier member CobbleStone Software and provides thought leadership content about how a vast array of professionals from myriad industries can improve their contract management, vendor management, e-procurement, and e-sourcing processes. CobbleStone® is an award-winning contract lifecycle management software built on artificial intelligence and machine learning.  CobbleStone Contract Insight can help organizations from various industries, including credit unions and the financial sector – centralize and increase governance over contract management, risk management, compliance management, and so much more.  Given the many success stories surrounding the use of CobbleStone, it's no wonder the organization has won so many awards. Ready to see what CobbleStone can do for you? Book a free demo today! 

CUES Learning Portal