Moving to Dual Risk Ratings

Despite the advantages of dual risk ratings, the industry has been slow to adopt them due to cost and a lack of resources. But thanks to advances in data availability and technology, that is changing—and just in time to help banks meet the challenging new CECL standard.

During RMA’s Risk Readiness Webinar, Tom Sebekos, Principal, Ernst & Young, Will Kutteh, Senior Manager, Credit Products, RMA, and Steven Martin, RMA Solutions, discussed dual risk ratings and shared best practices on how to deploy and get the most from them at your institution.

Steady C&I and CRE loan growth over the past 15 years has brought more loan originations and subsequently more to manage in bank portfolios. Yet the number of analysts in banks has remained flat. Although automation and technology have made analysts more efficient, dual risk ratings is an important tool to prevent analysts from being spread too thin.

The benefits of a more granular risk rating system are numerous:

  • Structure how much credit; who can approve; price for risk.
  • Enable more sophisticated reserving methodology.
  • Isolate credits requiring more frequent review.
  • Report on portfolio and risk rating trends over time.
  • Make strategic decisions to buy, sell, or hold.

The speakers outlined various implementation considerations of moving to a dual risk rating system: people, technology, effort, and money; the need for a key enabler, i.e. expert to trusted partner; evaluation of the differences between the existing and new systems; and management buy-in and advocacy.

Participants on the webinar were polled on what they feel are the greatest challenges to implementation. Resources was the greatest concern, followed by management buy-in.

For the full presentation, purchase a recording here.

Join us for upcoming offerings of the Risk Readiness Webinar Series.


RMA has brought to market a cost-effective dual risk rating product for banks that want to move from single risk rating to dual risk rating.

The RMA supports the movement towards dual risk rating as a more enhanced risk management practice because of several reasons:

  1. Increases consistency, transparency, and objectivity in the rating process
  2. Offers a more defensible method to evaluate risk as regulatory scrutiny increases
  3. Improved credit underwriting and helps to quantify credit risk
  4. Enhances portfolio management
  5. Provides additional options for CECL

The offering is comprised of five borrower scorecards/templates plus one facility scorecard/template and implementation support documentation. RMA engaged key member banks as Founding Banks and Advisors who actively participated in the offering development process. Founding Banks helped shape key design decisions and positioned their bank for early adoption.

For more information, please send an email to or visit

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