The Bottom Line

Four Reasons Not To Neglect the Contract Auto-Renewal Cycle

Posted by Russ Bourne and Bret Herbert on Jul 18, 2018 9:00:00 AM

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It seems like basic blocking and tackling on the surface, but you’d probably be surprised with how often it slips through the cracks. Most financial institution vendor contracts include a requirement that the client file a “notice of non-renewal,” otherwise the agreement will automatically renew at “expiration” on pre-defined terms. A multi-million dollar organization should have no trouble tracking such administrative to-dos as vendor contract management, right?

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Topics: Vendors & Contracts

Overwhelmed by Your Next Vendor Contract Renewal?

Posted by Ben Mrva on Apr 24, 2018 9:00:00 AM

Vendor Contracts

If you work at a bank or credit union and are the worrying type, there is no shortage of things to occupy your mind. However, it’s not what you know that should make you worry. Most often it is what we don’t know that creates more challenges.

For example, there’s a decent chance that for most financial institutions (FIs), vendor contracts are not the source of concern they should be, especially if the supplier is a company you feel does a good job for your institution. Given the numerous issues that must be addressed in the course of business at a bank or credit union, the axiom “if it isn’t broken, don’t fix it” often serves as a default. This may make it easy to rationalize letting contracts automatically renew with incumbents who are providing satisfactory levels of service.

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Topics: Vendors & Contracts

Has “Fintegration” Gone Too Far?

Posted by Ginger Schmeltzer on Apr 17, 2018 9:00:00 AM

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The reinvention of financial services has been underway for decades. Some may argue it’s been overhyped, but clearly most Americans bank in different ways than they did 20 years ago. This may be a case study of the Bill Gates adage, that humans overestimate the potential for near-term change but underestimate it in the long run.

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Topics: Vendors & Contracts

How to Maximize Value in Vendor Relationships

Posted by Myron Schwarcz on Apr 11, 2018 9:00:00 AM

-It's not just about price.-

(Hint: It’s Not Just About Price)

Obviously, every financial institution (FI) wants to get the best possible deal from their service providers. The definition of “best” can vary markedly by FI, however. We’ve found that before entering the vendor contract negotiation process, a cross-functional team is well advised to invest the time to determine what it most wants from the relationship.

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Topics: Vendors & Contracts

A Case Study in Why Vendor Contract Negotiation Details Matter

Posted by Cody Harrell on Mar 27, 2018 9:00:00 AM

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We’ve been preaching for some time the importance of closely tracking vendor contract amendments, subtle moves in transaction volumes, and other sometimes overlooked changes that can translate to meaningful shifts in a financial institution’s (FI) cost base and affect vendor relationships. We now have a real-time cautionary tale to help drive this point home.

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Topics: Vendors & Contracts

How Can Banks and Credit Unions Tap Into the AI Revolution?

Posted by Lawrence Pruss on Feb 27, 2018 9:00:00 AM

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Artificial Intelligence (AI) is the hottest buzzword in financial services. The nation’s largest banks are placing big-money bets on this still nascent technology, and countless startups are working feverishly to stake their claim to various use cases.

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Topics: Vendors & Contracts

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: Vendors & Contracts

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: Vendors & Contracts

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: Vendors & Contracts

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: Vendors & Contracts