The financial sector is made up of many different industries ranging from banks, investment houses, insurance companies, real estate brokers, consumer finance companies, mortgage lenders, and real estate investment trusts (REITs).
Vendor management comprises all of the processes required to manage these third-party vendors that deliver services and products to financial institutions. Significant effort is required from both the institution and the third-party vendor to maximize the benefits received from the relationship, service, or product, while simultaneously minimizing associated risks. As the scale, scope, and complexity of these relationships and services increase, the related risks and the importance of effective vendor management should proportionately increase.
Third-party risk management continues to receive a heightened degree of attention from the regulatory community. Because financial institutions will continue to be liable for the actions of their vendors, they cannot risk a bare-bones third-party risk management program.
In addition to traditional core bank processing and information technology services, banks outsource operational activities such as accounting, appraisal management, internal audit, human resources, sales and marketing, loan review, asset and wealth management, procurement, and loan servicing. The increased use of outsourcing to third-party vendors and the importance of the relationships between banks and those vendors intensify the need for community banks to have highly effective third-party vendor risk management programs in place.
A financial institution can reap clear benefits from outsourcing certain functions and engaging with third-party service providers. Third-party arrangements can help management to achieve its strategic objectives, including lower costs, increased revenues, and expansion of a customer base or product capabilities.
Over the past several years, managing third-party vendor risk has required greater attention from community bankers. On a daily basis, cyber-related incidents and contingency plan failures occur, involving serious to sometimes critical incidents that may have significant impact on community banks. As a result, bankers have devoted more resources to vendor risk management, integrating vendor management oversight into their critical processes. Therefore, it should be no surprise to anyone that the adequacy of vendor risk management is a top concern for community bankers and regulators.
LIMITLESS offers a fully managed solution to ensure you are “paying for what you are receiving”. Ensuring contract terms are met as well as compliance standards. Tracking any potential risks, optimizing your billing and managing all contract and agreements in one central software solution.
Outsourcing vendor management to a third party will also help standardize processes; and consistency helps enable the transparency essential to effective governance. This helps to alleviate flawed data, and costly mistakes.
Our software will not only house every contract, service agreement, warranty or renewal agreement, but we also manage negotiations for better rates and terms saving your business from unnecessary fees and costs while maintaining quality standards. If you have questions regarding how to manage vendor contracts/agreements or would like more information regarding our fully managed vendor management solution contact LIMITLESS at (866) 504-4050.