A small family-owned financial institution is at crossroads when it comes to deciding the best way to implement new vendor management regulations. These have been passed on by the Federal Deposit Insurance Corporation. As with most small banks and growing banks, you may be an important financial partner in a small community or rural area that relies on you to help them through difficult economic times. Therefore, it is crucial that you make sure your contract management efforts are efficient and effective.
You have two options to solve this problem: either a manual, paper-based method or the acquisition of software-based solutions specifically designed for companies that need compliance with the Federal Deposit Insurance Corporation regulations or the Office of the Comptroller of the Currency regulations. No matter which solution you choose, there are several areas that you need to be aware of. Below is a list of areas that you can focus on. Although they are not comprehensive, these can be a great starting point to help you get started with the process of checking and balances.
1. It is crucial to do your due diligence and only establish a need-and-services relationship. Investigate the potential provider thoroughly. Although there are always risks involved in any venture you embark on with others, it is crucial to reduce them. You can build a productive working relationship with your provider by getting to know them well.
2. A significant risk assessment should be done for all suppliers who are expected to provide goods and services to your bank. This includes service providers that are essential to your financial institution, such as POS providers and ATM maintenance.
3. This is a great way to ensure that you have all the tools you need to review and monitor the relationships you have built for your institution. It is recommended that you conduct annual reviews and that you keep good records throughout the year. Sales agreements with service providers and goods are often set up on an annual basis. Consider a thorough review of the agreement before renewing it.
A large responsibility comes with being a bank that is successful, especially in rural areas. You are an integral member of your community, and you work hard for the respect and trust of your clients. It is important to do your best to build excellent working relationships with the companies that you outsource services. If you do your due diligence, perform risk assessments and review your relationships with service providers regularly, you will be able to ensure that your institution is fully compliant with all laws and regulations. This will allow you to offer top-notch customer service.