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The Bottom Line

SRM Perspectives on Key Industry Trends

Has “Fintegration” Gone Too Far?

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

fintegration

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

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: Vendors & Contracts

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: Strategic Sourcing, Vendors & Contracts

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