Vendor Management Software admin 2014-08-18T16:49:39+00:00
Proactively manage your financial institution’s vendor risks and contract compliance management process
What is Vendor Management?
It is the process of managing, developing and controlling relationships and agreement with multiple third-party vendors and contractors to drive service excellence, control costs and minimize third-party risk exposure. Financial Institutions need to ensure that the products and services provided by the third-party vendors and contractors are safe and comply with applicable laws, regulations and standards.
- Banks and other financial institutions are increasingly using multiple third-party vendors and contractors to expand the range of product offerings, improve customer experiences, reduce time to market, lower service delivery costs and manage costs and available resources. However, reliance on third- party service providers increases the complexity of risk management and exposes them to other company’s management and infrastructure risk. Failure to manage these risks can expose banks and other financial institutions to financial reporting errors/monetary losses, regulatory fines/penalties, reputational damage, litigation and might even hamper their ability to do business.
- The increased regulations on the financial services industry like, Consumer Protection Act, BSA/AML, FCPA etc to name a few, has significantly increased requirements for the management of third-party compliance. Ensuring that the products and services provided by third-party service providers are safe and comply with applicable laws, regulations and standards is the responsibility of financial institution’s senior management and the Board.
- Financial institutions need to oversee third- party relationships like their any other division and they cannot outsource risk or regulatory obligations.
- Predict360 Vendor Management Software gives you the ability to centralize your financial institutions vendor management process – all your suppliers, procurements, contracts and reviews in one place. Track and monitor your contracts and other vendor documents. You can also assign access rights and roles to different users in the system depending on their respective responsibility.
- Financial Institutions can document their agreements and track their billing processes and order distribution. It also provides the ability to manage risk and analyze the effects of vendor relationships on the organization’s risk index.
- Our Vendor Management Software enables your financial institution to efficiently manage vendor risks and contracts and prevents it from oversight through a complete vendor management process.
- Financial institutions can benefit with the services provided by third party vendors and contractors while managing the risks posed by these vendors efficiently and effectively.
- Financial Institutions no longer have to rely on spreadsheets and word processing tools as these prove inefficient in meeting the stringent requirements of the auditors.
- Streamlines financial institutions vendor risk assessment which includes surveys for audit-based risk management that helps assess risks in all regulatory compliance functional areas such as financial, operational, IT, brand, competency, internal audit, quality management, regulatory compliance and reputation with the ability to execute corrective and preventative actions directly from the results.
A simple 4 step approach to managing vendors
Managing vendors is extremely difficult. Expectations on both sides are different, and over a period of time, the chasm is so wide and deep that it becomes difficult to move on. Additionally, the regulatory changes have made it mandatory for every financial institution to take an active interest in their vendors’ level of compliance with regulations and standards in the financial industry. Tracking compliance of the vendors is an additional cost for the financial institutions. Here is a 4 step recipe to combat the cost, and increase productivity.
Step 1: Common Best Practices: Trim the number of vendors, hire good negotiators, specify payment terms, set up a vendor rotation scheme (every 3 years or so), do the 80/20 analysis of the goods and services obtained and so on.
Step 2: Analyze the business processes to ensure vendor compliance. Determine which of these can be automated.
Step 3: Install and configure Predict360 for Vendor Compliance management. Integrate with current Purchasing Department tools and any Enterprise Resource Planning (ERP) system.
Step 4: Track vendor compliance from the Predict360 dashboard. Take actions like creating tasks and filing vendor compliance reports from the Predict360 application.