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The unintended consequences of declining vendor financial performance

Jun 5, 2015 by Venminder Experts

Should you discover that your bank or credit union vendor's income and financial performance is declining, there are some unintended consequences you need to look out for.

Look out for these 3 signs:

1. Cost Cuts and Staff Reductions. When a vendor cuts costs and then reduces staff this could affect the level of customer service that you have been receiving. Also, cost reductions in the operations area could decrease staff who are charged with maintaining the security of the system.

2. Research and Product Development Stalls. A vendor could quit spending on product development, sunset a product or sell their operating division. This could result in bugs, unresolved issues, long waiting periods, downtimes and more.

3. Acquisition. If your vendor acquires or is acquired, money can be tight. Does your vendor or the parent company have money to sustain the current level of service? 

Protecting your financial institution

Your SLA is the key to managing a vendor who has poor financial performance. 

Lack of financial performance is generally not a condition for termination of a contract. However, since declining financial performance usually manifests itself in other ways, your SLAs become incredibly important.The SLA can trigger a default.

Venminder Financial Analysis Sample

Venminder Experts

Written by Venminder Experts

Venminder has a team of third party risk experts who provide advice, analysis and services to thousands of individuals in the financial services industry.

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