Welcome to this week’s Third Party Thursday! My name is Branan Cooper and I’m the Chief Risk Officer here at Venminder.
In this segment, we’re going to cover:
First, let’s refresh what vendor contract management is.
Vendor contract management is a well-managed process for handling all agreements with the financial institution’s third parties from start to finish. This includes all aspects of the contracts, from standards on what should be included to who is authorized to sign to how they are centrally stored, to how they are tracked to key provisions that must be included, to how your customer’s information is protected and much more.
Now, let’s talk about some best practices…
Ideally, your institution will have one designated area for all contracts – stored in one repository with tracking to make sure key terms, like expiration dates and renewal notice periods, are always observed.
If the contract process was already decentralized, it is extraordinarily difficult to get it all into one location, physical or electronic.
It’s not unusual to have people rifling through filing cabinets to find old forgotten contracts.
Putting the time and the effort into it are well worth it – after all, there is a great deal of responsibility written into each party’s side of the contract.
Ideally, the contract negotiation and writing is done by an experienced staff, including your legal counsel.
Pay particular attention to key sections like requirements around service level reporting, rights to audit information, perhaps even a right to make an onsite visit.
One area that often seems to lack a lot of attention are the termination steps and what happens post contract to your customer's information and other confidential data.
All of these steps should be considered in your contract management process.
To recap – it's not enough to simply gather contracts, you need a well documented and thorough process for identifying, including and managing the key provisions.
Again, I'm Branan Cooper and thank you for watching! If you haven’t already, please subscribe to the Third Party Thursday series.