Independent Banker - December 2021 - 33

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vendor management is important
because of the extensive due
diligence required, says Kevin
Tweddle, ICBA's senior executive
vice president of community bank
solutions. Community banks
also need to have a good contract
attorney to advise on larger
contracts. This person should also
understand regulatory guidelines,
he adds.
Perform ongoing
vendor assessments
To avoid regulatory scrutiny,
community banks should
formally review critical vendors
at least once a year. Less essential
vendors tend not to be assessed as
frequently, but this can be a missed
opportunity to extract pricing or
other efficiencies. Informal reviews
throughout the year are also
important so banks can catch and
rectify issues in a timely manner,
community bankers say.
Employees who use a vendor's
products or services should be
encouraged to give performance
feedback and share concerns at
any time. There's no need to settle
for subpar service, says Chris
Wewers, chief financial officer of
$2 billion-asset Southern Bancorp
in Arkadelphia, Ark.
" In many cases, there are other
vendors you can turn to, " Wewers
says. " That just takes some
advance planning. "
Set clear expectations
When you sign a vendor
contract, make sure it includes
clear, measurable expectations
where applicable, Gallman says.
This gives community banks a
quantifiable way to determine
whether there are gaps as the
relationship progresses.
If a vendor doesn't automatically
8 questions to ask
when evaluating
a vendor
It's important to be
thorough during the
vendor evaluation process.
Here are some key
questions to ask:
" In many cases,
1. Is the vendor continuing
to deliver a product or
service that is best of breed
or has it become a laggard?
2. Is the pricing
competitive and in line with
the services provided?
3. Does it provide all
the functionality your
community bank needs?
4. Is the product or service
keeping up with the pace
of change in the industry?
5. Is the vendor continuing
to provide products and
services that consumers
and businesses are
looking for?
6. Is this vendor helping
your community bank
achieve its objectives
efficiently?
7. Has the vendor shown
an ability to pivot quickly
when change is required?
8. Does the vendor have a
tried-and-tested business
continuity and disaster
recovery plan?
there are other vendors
you can turn to.
That just takes some
advance planning. "
-CHRIS WEWERS,
SOUTHERN BANCORP
include an exit clause in its
contract, Southern Bancorp
typically requests a provision
allowing it to be released after 30
days. This allows for more flexibility
if problems come up, Wewers says.
Wewers cautions against
letting repeat problems drag on
unnecessarily. It's better to cut
your losses and move on, he says.
He offers the example of a vendor
that underperformed for about
18 months before his previous
employer finally severed ties. The
bank had been sending notices
of dissatisfaction every 90 days,
and Wewers believes it should
have made a move sooner to avoid
wasted time and energy.
" If you find yourself on that roller
coaster, that's when you need to
go ahead and be ready to move, "
Wewers says. 
Cheryl Winokur Munk is a writer in
New Jersey.
independentbanker.org Q 29
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Independent Banker - December 2021

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