Unlocking the Power of Instrument-Level Planning in a Changing Interest Rate Landscape
Loan rates are expected to drop by the end of 2024. This is great for lenders, but how do financial institutions keep up with the change while efficiently and accurately adjusting financial forecasts? Excel spreadsheets are a common tool, but they’re not designed to handle the volume of data you need to fully analyze, predict, and adjust to changes in your instruments.
Workday Adaptive Planning enables financial institutions to do instrument-level planning to manage their financial instruments, such as loans, bonds, and other securities, with greater precision and agility.
Detailed Modeling of Financial Instruments
To make the most of every opportunity, detailed modeling at an individual instrument level is key. Workday Adaptive Planning enables financial institutions to model each financial instrument individually to capture unique attributes including interest rates, maturity dates, and payment schedules. Lenders can also create customized templates, increasing consistency and accuracy in planning and forecasting.
Dynamic Scenario Planning and Analysis
Static planning is the way of the past. Modern financial institutions are positioned to thrive when they can easily run multiple scenarios – such as rate hikes, cuts, and fluctuations – to understand their impact on individual instruments and the overall portfolio. Workday Adaptive Planning also allows institutions to conduct stress tests to evaluate how changing market conditions might affect their financial instruments, arming them with the information and agility to adjust quickly if needed.
Driver-Based Forecasting
Hand-in-hand with scenario planning, Workday Adaptive Planning also enables users to link key drivers like interest rates to financial outcomes to forecast performance more accurately. Institutions can then dynamically adjust their forecasts based on real-time data, thus remaining relevant and responsive to market changes.
Agility in Action
KeyPoint Credit Union uses Workday Adaptive Planning to analyze how a variety of factors may impact their bottom line. Interest rate hikes can have a significant impact on KeyPoint and its customers, so they model out a variety of assumptions – for example, say the Fed increases rates by 200 basis points – to evaluate potential scenarios. Read the KeyPoint Credit Union case study, here.
“It’s a very simple process to go into the model, change those rate assumptions and then refresh the model and see what those results are. And it’s the gains and efficiency that you get in [Adaptive Planning] that have allowed us to do a variety of ‘what ifs.’”
Real-Time Integrations and Market Data Insights
Workday Adaptive Planning is system agnostic, so you can load in any datapoints needed to support your planning and reporting, from your GL, operational metrics, and workforce data to real-time market data feeds that can help financial institutions stay updated on interest rate changes and other relevant market movements.
Automated data integration ensures that your Workday Adaptive Planning environments is continuously updated, reducing the risk of outdated or inaccurate forecasts.
Want to Learn More?
Watch our on-demand webinar, Instrument Level Planning with Workday Adaptive Planning to learn more and see a live demo of the tool in action. If you prefer a personalized demo, click below to get in touch with our team.
