The Bottom Line

Navigating the Complexity of Vendor Contract Negotiation 

Posted by Myron Schwarcz on Jan 24, 2018 9:00:00 AM

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Not that they ever were simple, but there has certainly been a notable uptick in the complexity of legal agreements between financial institutions (FIs) and service providers recently.

The driving factors behind this trend are logical­, with the current regulatory environment requiring more aspects of vendor contract relationships to be formalized. Particularly where service providers have access to customer data or support critical operations, enhanced regulatory scrutiny of third-party obligations creates added motivation for both FIs and vendors to limit their exposure. Documenting each party’s responsibilities in detail may help, but in the event of an issue, the hard truth is that customers will look to their FI for resolution, not a back-office provider whose name they don’t recognize.   

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Topics: Vendor contract negotiation

Always Vigilant: The Potential Cost of Not Auditing Vendor Invoices

Posted by Patrick Goodwin, President on Jan 11, 2018 12:00:00 PM

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Vendor contract management is something that every financial institution (FI) undertakes as part of the cost of doing business. The average number of contracts a bank or credit union may have varies, but it is not unusual to see the number fall in a range of between 100 to 500 contracts on average. 

While every FI is looking for ways to trim costs, many treat vendor contract management as a responsibility that can be simply added to the list of duties held by an employee that probably already has a full plate. The ever-increasing complexity of contracts and the growing number of vendors can make this approach very expensive for an institution. 

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Topics: Vendor Contract Management

The Importance of Healthy Vendor Contract Relationships

Posted by Brad Downs on Jan 5, 2018 11:00:23 AM

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In our last blog post, I recounted the industry changes that SRM has witnessed – and in some cases helped drive­­ — since opening our doors 25 years ago. As a follow up, I’d like to highlight a key principle that hasn’t changed since 1992, one that has enabled us to successfully deliver more than $2 billion in savings – and counting – to our financial institution (FI) customers.

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Topics: Vendor contract negotiation, strategic sourcing

25 Years Ago Our Business Began with a Pivot, We’ve Never Looked Back

Posted by Brad Downs on Dec 20, 2017 9:00:00 AM

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In August, SRM marked its 25th year of providing organizations with the experience and information required to optimize their contractual relationships with vendors. Although we’re far more focused on serving our clients in the present and expanding the reach of our expertise in the future than we are on our past accomplishments, it’s gratifying to be reminded of the positive impacts we have delivered to our customers over the time we have been in operation.

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Topics: Vendor contract negotiation, bank vendor management

What You Don’t Know About Regulatory Changes Can Help You

Posted by Myron Schwarcz on Dec 14, 2017 10:00:00 AM

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While much of the attention paid to regulatory requirements for financial institutions (FIs) tends to focus on Dodd-Frank and mandates issued by the Consumer Financial Protection Bureau, a notable change of late has been the heightened requirement for vendor management oversight and third-party risk assessments. Although the Bank Service Company Act is hardly new, it has recently become the basis for these types of mandates. Powered by different agencies, the message is essentially the same: When it comes to vendors, the buck stops with the FI. In fact, the FDIC requires that it be notified within 30 days of any new service provider relationship being struck.

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Topics: credit union vendor management, bank vendor management

One Term, Many Meanings: Understanding Your Vendor Contracts

Posted by Cody Harrell on Dec 6, 2017 9:00:00 AM

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It’s no secret that our industry is littered with acronyms and jargon Most of the time it is used as a type of helpful shorthand. Even so, an outsider overhearing a conversation incorporating some of this “industry speak” might believe those of us in financial services speak an entirely different language. The truth is sometimes those of us in the industry struggle to translate the latest term or buzz word correctly. 

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Topics: Vendor Contracts

Vendor Contract Negotiations: In Pursuit of a Win/Win

Posted by Patrick Goodwin, President on Nov 29, 2017 9:00:00 AM

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While the vendor contract negotiation exercise does not need to be an adversarial one, the chances for a happy outcome are increased when both parties feel they are being treated fairly. In fact, that is the goal of most vendors and financial institutions (FIs) we have worked with. After all, vendors have no future without FIs and FIs have not future without vendors. It is in everyone’s best interest to work toward a deal that meets the needs of all the parties around the table.

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Topics: Vendor contract negotiations

What’s Trending in Vendor Contract Management? Trimming Branches via E-Tellers

Posted by Russ Bourne on Nov 15, 2017 9:00:00 AM


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SRM recently reached out to several dozen credit union clients to better understand their priorities for the next 12 months, including new product rollouts to address areas of greatest interest to members. Their responses cover a wide area, which isn’t surprising given the unique client segments being served. Nonetheless, certain trends clearly emerge.   

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Topics: Vendor Contract Management, Interactive Teller Machines, ITMs, Virtual Teller Machines

The Core System Conundrum

Posted by Michael Carter on Nov 8, 2017 9:00:00 AM

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Replacing a bank or credit union’s core system is not a decision to be taken lightly. A conversion to a new software provider can easily take more than a year in a best case.  These projects have often been compared to a heart transplant – very expensive, high risk and resource intensive. They also usually consume IT bandwidth that is needed to respond to a litany of business priorities such as the front office channels, products and services consumers depend on daily.

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Topics: bank vendor management

“Trust, but Verify” – When Managing Vendor Contract Negotiations

Posted by Michael Carter on Oct 25, 2017 9:00:00 AM

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Ideally, a good business partnership should result in a “win/win” for all parties involved. Vendor relationships are no exception. No vendor will last long if their approach is predatory toward their clients. 

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Topics: Vendor contract negotiation, Vendor contract negotiations