6 Vendor Management Tips for Fintechs

Fintechs have transformed the financial world – bringing speed, agility, and innovation to the forefront. Third-party vendors help power that transformation, enabling fintechs to scale fast, integrate new tech, and stay competitive.  

While these relationships are critical, they also come with risks. That’s where vendor management steps in. It’s a strategic way to safeguard operations, ensure service quality, and maintain client trust.  

By building strong and secure relationships with vendors, your fintech improves performance, reduces costs, and makes better business decisions.  

Why Vendor Management Is Important for Fintechs

In the fintech industry, success hinges on trust, speed, and seamless experiences. Unmanaged vendor relationships can lead to service outages, unhappy clients, and lost revenue. 

Effective vendor management ensures vendors meet and exceed expectations, so the client experience remains consistent and reliable.  

Vendor management also builds credibility. Your clients trust your fintech to protect their data and deliver smooth services. A strong vendor management program demonstrates to clients that your fintech is secure, well-run, and dependable.  

Related Content: Why Is Third-Party Risk Management Important?

6 Vendor Management Tips for Fintech Organizations

Following these vendor management tips helps your fintech meet client expectations and protects you from external risks:  

1. Build a good vendor management foundation. 

Start with clear vendor management policies and program documents. These define your framework, goals, and responsibilities. Many clients will want to see these documents. It provides evidence that your fintech follows the right vendor management practices. Ensure senior leadership or the board reviews and approves your vendor management governance documents. 

2. Tier vendors based on risk.

Not all vendors are equal. Classify them by risk level – high, medium, low, or even more granular tiers like medium-high. This ensures oversight is scaled appropriately. Be sure to document your risk classification framework. 

3. Perform thorough due diligence. 

Vendor due diligence isn't a checkbox – it's how you uncover risks. Depending on the vendor’s risk level, review SOC reports, cybersecurity practices, financials, and compliance history. It tells you how they manage risk – and what you need to watch. 

4. Don’t neglect vendor contract management. 

A contract outlines the vendor relationship and your expectations for it. Don’t just file it away. Track key dates and hold vendors accountable to the terms. Make sure the vendor contract includes:  

• SLAs 
• Data security  
• Audit rights 
• Termination clauses 
• Compliance expectations 
  

5. Monitor vendors continuously.  

Vendor risk evolves – especially in fast-paced fintech environments. Consistently track performance metrics, incidents, compliance updates, and negative news. Use automation and risk intelligence tools to stay one step ahead. 

6. Know the regulatory landscape.  

Your clients face strict regulations. They expect your fintech to align with those same standards. Stay up to date on regulatory changes and document how your program meets the requirements. Even outside of regulations, vendor management is just smart business. 

Related Content: Vendor Risk Management 101: Building a Stronger Third-Party Risk Program 

Fintech companies aren’t successful just through innovation – it also depends on building strong, secure, and compliant vendor relationships. Sound vendor management is ultimately a competitive advantage. Following these six steps helps your fintech stay ahead of the curve.  

Learn more best practices for your fintech company to implement in this free infographic.