No serious cyclist would ever dream of riding their bicycle without wearing a helmet. Personally, having been hit by a car twice while cycling, I probably should wear a helmet every time I talk about bicycles. Obviously, I don’t go out riding worried about crashing but I do take the right equipment so that if I do wipe out, at least my skull is well protected.
Vendor management acts as a helmet
In your financial institution, you need to protect your intelligence the same way – you don’t want to go into any new third party relationship worried about how it could all fall apart, but you should at least protect your institution.
What does it mean to protect the institution?
There are 2 key examples that I think of. Make sure you:
a). Have the right information and insurance policies as part of the due diligence process
b). Build in strong mutual protections in every contract, protecting both your institution and the third party
Remember, if you take the right steps ahead of time, if things do fall apart, it still might hurt, but it’s not going to bring the institution down to a halt.