We’re thankful for our company, our customers and our ever-growing set of products and services. As we pause to spend Thanksgiving time with our families and friends, we thought it would be a good idea to remind ourselves of all of the ways we can be thankful for a good third party risk management process.
If it weren’t for good vendor management…
- We wouldn’t meet regulatory demands.
- You can reference a list of important guidance here
- We could fail to serve our customers.
- For example, read the UniRush enforcement action
- We could lose our strong reputation
- Reputation risk is a major area of focus
- We could be in the headlines in a way no one wants
- Read how to learn from an enforcement action here
- We could get slapped with an enforcement action and be fined
- Learn more here
- We would get hacked/data stolen
- Remember Equifax? Target?
- We could turn a deaf ear to consumer complaints
- Re-read the UniRush enforcement action above - UniRush did not have an adequate plan to step up its customer service response to meet the increased demand caused by service disruptions. Even after hiring additional personnel, UniRush failed to train customer service agents in time to meet the surge in demand. As a result, some consumers who called customer service waited on hold for hours and could not obtain critical information about the status of their funds and accounts. What a nightmare.
- We could end up in financial ruin
- Read Equifax by the numbers
- We could be stuck in bad contractual agreements
- Contracts without the chance to address recurring areas of concern - yikes
- We might fail to protect our institution, our shareholders and our customers
- How disappointing. Reminder that regulators' main goal is to prevent that. For example, the CFPB’s "About the Bureau" mandate says, "We aim to make consumer financial markets work for consumers, responsible providers and the economy as a whole. We protect consumers from unfair, deceptive,or abusive practices and take action against companies that break the law."
- We wouldn’t be able to properly recover from a natural disaster
- Remember Superstorm Sandy or this past summer’s hurricanes? Weather truly affects us often
- We would run into all sorts of nasty surprises
- Problems come in all shapes and sizes and unexpected ways
- We might allow other parts of our compliance management system to fail
- Vendor management is integral to safe and sound business practices
- We wouldn’t exceed customer/member expectations
- Think about consumer reaction to the Wells Fargo scandal
- We would not have a strategic business advantage
- Good vendor management is a sound practice
Now, aren’t you glad we’re all working together to create a robust and thriving third party risk management process? Happy Thanksgiving.
For some third party risk management best practices, download our infographic.