Independent Banker - December 2024 - 23

Next: Where Gen Z fits into the banking industry 
and risk management at DD&F
Consulting Group.
Moraczewski notes that vendor
management software programs have
made great strides. " The software has
come a long way, " she says. " There are
tools to help us oversee and manage
[vendors]. They provide reminders
and help with preparing reports and
getting surveys. "
Software isn't a silver bullet,
however. Even with its help, Andrew
Tinberg, president and CEO of
$1.7 billion-asset CNB Bank & Trust
in Carlinville, Ill., reports that vendor
management is taking up more time.
" Software has become critical to us,
but even with that investment, we still
find that as we expand the number of
vendors, the management is almost a
full-time position. "
Delegate responsibility
Beyond software, vendor
management requires thorough
and consistent decision-making.
Harris has seen many banks struggle
with assigning decision-making
responsibilities. " I've seen banks
where one department manages one
set of vendors, and another manages
another set, " she says. " Everyone has
their own way of doing it, and that
creates inconsistencies. "
Harris suggests that responsibilities
can effectively be broken up into
" process " versus subject matter
very detailed, and it has links to due
diligence forms that may be required. "
Maintaining positive
vendor dynamics
" With every exam,
every audit we go
through, we learn
something new [about
vendor management]. "
-JENNIFER MORACZEWSKI,
TIOGA STATE BANK, N.A.
Managing vendors isn't only about
tracking contract details; it's also
about managing the relationships.
Kelly advises banks to foster
relationships at multiple levels within
a vendor to ensure continuity.
" People move around, " he observes.
" You don't want all of your ability
to work with a vendor with that one
representative who left. I always
recommend having a few layers
of contact. "
QUICK STAT
200+
Vetted vendors available for ICBA
members to contact through
solutions.icba.org
expertise. " One person keeps all
of the information and knows [the
contract details, terms] and when the
vendor should be contacted, and then
outsources the review based on subject
matter expertise, " she explains. " For
example, if financial analysis needs to
be performed with financial statements
from the vendor, you need the CFO or
another financial executive to do that. "
CNB Bank & Trust takes a similar
approach. " We have one person
that manages the process and
quarterbacks the whole relationship
and stays abreast of the contract
and the terms that should be in any
contract, " Tinberg explains. " They
rely on experts elsewhere. "
Bank of Springfield has introduced
a proposal process that formalizes
how vendors are engaged and trains
employees in managing vendor
relationships. " When an employee
requests a new relationship or a new
service, the proposal process walks
them through all of the documents
we need and which departments
are involved, " Adams explains. " It's
Tinberg believes banks would do
well to fundamentally rethink their
vendor partnerships and move away
from the " core provider " framework.
This has implications for contracts.
" Some of these auto-renewal terms
were traditionally based in a legacy
technical relationship, but they don't
have to be included with a fintech
vendor, " he notes. " We're thinking
in terms of starting with a blank
contract and making sure we have
an exit strategy, and then managing
that contract. "
Moraczewski believes that
banks and vendors are working
more cooperatively as they
better understand each other's
requirements. " We have more
experience with vendor management
than when we started, " she says.
" With every exam, every audit we go
through, we learn something new. "
Vendors are also leveling up.
" Vendors are more accustomed to
providing documents we need, and
many have a package prepared for
financial institutions, " Moraczewski
says. " Many are working with ICBA so
they can get more educated on what
their customer base needs. "
Judith Sears is a writer in Colorado.
independentbanker.org // 23
http://solutions.icba.org http://www.independentbanker.org
Independent Banker - December 2024

Table of Contents for the Digital Edition of Independent Banker - December 2024
