The Bottom Line

What You Lose By Negotiating Your Own Card Agreements

Posted by Bob Koehler on Feb 21, 2018 9:00:00 AM

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In a recent blog I noted that many financial institutions (FIs) continue to process debit transactions through four or more PIN networks, mainly due to inertia. There are numerous reasons to streamline this process — volume discounts, simplified back-office routines, reduced risk — none of which carry customer impact. Most networks no longer require their logos to be listed on the back of the card, so there’s not even a need to reissue plastic.

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Topics: Vendor Contract Management

Vendor Cost Benchmarking —How to Simplify a Grueling Task

Posted by Michael Carter on Feb 13, 2018 9:00:00 AM

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While negotiating a new vendor agreement may be the most visible part of the vendor contract management process, it’s the tedious attention to detail after the ink is dry that ensures the hard-fought cost savings materialize as promised.

This isn’t to say that service providers are looking to pull a fast one. Honest errors can (and do) occur on both ends of the agreement, probably more often than most of us would like to think. Circumstances, both internal and those dictated by market forces, also change over the life of a multi-year contract, leading to results that differ from expectations when the agreement was struck. That’s why ongoing auditing and benchmarking are essential components of any vendor contract management program.

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Topics: Vendor Contract Management

Can You Swipe Me Now? – Choosing the Right PIN Network

Posted by Bob Koehler on Feb 6, 2018 9:00:00 AM

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Americans of a certain age recall the not-so-distant days when one had to check the logos (“bugs,” in banking parlance) on the back of their card to confirm it would work at a given ATM machine or retail terminal. For this reason, financial institutions (FIs) join multiple networks to ensure sufficient reach for customers, particularly those who traveled outside their home region. As a result, the multitude of bugs on the back of cards made them look like a NASCAR driver’s coveralls.

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Topics: Vendor Contract Management

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

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 Next Generation of Mobile Banking

Posted by Michael Carter on Oct 18, 2017 9:00:00 AM

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In my last post, I recounted the extent to which the iPhone transformed the very notion of mobile banking. Let’s now shift the focus to catalysts for the next wave of banking innovation.

While the iPhone’s quantum leap occurred in 2007, its full impact on financial services didn’t emerge overnight because it took developers some time to leverage the opportunities this new platform enabled, and then another chunk of time for many financial institutions (FIs) and mass market consumers to embrace those capabilities. These phases were essential to making the smartphone the indispensable tool for navigating modern life, and they would be and will be repeated on rare occasions. 

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Topics: Vendor Contract Management, Vendor contract negotiation, mobile banking

How Vendor Contract Management Can Help You This Budget Season

Posted by Ben Mrva on Aug 30, 2017 12:30:00 PM

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For anyone working at a company with a calendar-based fiscal year, the August dog days of summer also mean the advent of the annual planning cycle. Odds are that department heads are being asked to “do more with less,” or at least to increase output at a faster rate than costs. As anyone with budget responsibility is well aware, it’s no easy task to fund reasonable pay increases for valued employees let alone accommodate growth in other expense areas.

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Topics: Vendor Contract Management, credit union vendor management, bank vendor management

Core Conversions: Are Financial Institutions in Denial or Pursuing New Approaches

Posted by Michael Carter on Aug 18, 2017 12:00:00 PM

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Much has been written about the “stickiness” of consumer payment apps and their value in cementing bank and credit union relationships with customers and members, but behind the scenes at most financial institutions (FIs) there is a far stickier relationship.  In this relationship, the bank or credit union is the customer and the cement composed of those mission critical services provided by their core processing vendor.

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Topics: Vendor Contract Management, Vendor Contracts, strategic sourcing

How Tech Trends Lead to Longer Vendor Contract Rosters

Posted by Michael Carter on Aug 9, 2017 11:00:00 AM

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Most bankers would agree that, all other things being equal, minimizing the cost of complexity is a key operational goal, which normally means consolidating around a limited number of financial services vendors. The big “gotcha” in the above statement, however, is that all other things are rarely equal, and recent industry trends reveal that other factors are at work.

In a perfect world, core banking service providers would serve as one-stop shops for ancillary products like mobile banking and remote deposit capture as well. In fact, an acquisition spree by the cores over recent years was aimed to round out their portfolios and solidify that single-source status. Recently, however, newer startups have delivered compelling enough innovations to prompt financial institutions (FIs) to expand their horizons. 

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Topics: Vendor Contract Management, Vendor contract

Regulations Are a Fact Of Life: Don’t Let Vendor Contract Management Create More Expenses

Posted by Patrick Goodwin, President on Aug 2, 2017 11:30:00 AM

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The spiraling cost of complying with an ever increasing regulatory burden is possibly the greatest challenge facing US banks and credit unions – it’s not an exaggeration to label it an existential threat for some institutions. However, this threat can be mitigated by utilizing expertise available from compliance and strategic sourcing firms as well as via software automation. It won’t make the regulations go away, but it makes the process more efficient and helps make it less likely that something is overlooked.

Download, Beware of Greeks Bearing Gifts

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Topics: Vendor Contract Management, Vendor Contracts, strategic sourcing, Vendor contract