Learn three questions to ask yourself to determine if your vendors are critical. Then, we'll dive deeper and talk about what you should review on your critical risk vendors.
Welcome to this week’s Third Party Thursday! My name is Dana Bowers and I’m the CEO/Founder and Board Member here at Venminder.
In this video, we’re going to cover the key questions you need to ask yourself about your vendors to determine if they are critical.
First, it's important to separate this from your assessment of the regulatory areas of risk – what we're talking about today are critical vendors, from a business impact standpoint - these are the ones that would stop your business in its tracks if they were suddenly to disappear.
It's important that you define these very early on because you're going to want to handle them a bit differently than other vendors.
So, to determine if a vendor is critical, ask yourself these 3 questions:
If the answer to any of these is "yes", then it's a critical vendor.
Let's talk about why critical vendors are so vital. Critical vendors involve significant financial institution activities, which means activities that they:
Finally, and perhaps most important of all – you need a well thought out and thoroughly tested exit strategy to be sure you have a plan should something unexpected happen. You should even try to include this exit strategy in the contract between your institution and your critical vendors.
The business impact of a critical vendor is something you need to carefully evaluate and plan accordingly. It's important to your institution and to your customers.
Again, my name is Dana Bowers and thank you for watching! If you haven’t already, subscribe to the Third Party Thursday series.