This is the first of two articles that addresses vendor management and how to strengthen the relationships you have with them.
Credit unions rely on third-party providers to offer specialized services and technology assistance to help keep operations running without a hitch. Improving quality and overall efficiency should be a priority with any credit union vendor management program.
Here are six steps to not only make your vendor management program work more efficiently, but also strengthen it in the process. Keeping within compliance risk is an important element in vendor management.
Develop Risk Assessment
Properly assessing risk exposure for vendors is of the utmost importance. This will help you grade or designate a “within scope” level of critical and risk for each service and each vendor.
Perform Thorough Due Diligence
The due diligence process ensures that a credit union has a consistent and reasonable approach to vetting its vendor relationships. Conducting diligence throughout every relationship is essentially to avoid surprises throughout the process. Properly vetting and managing vendors will also ensuring all FFIEC and NCUA regulations and requirements are met.
Incorporate Vendor Management into the Business Continuity Plan
If a credit union does not thoroughly analyze its vendors as part of the business continuity planning (BCP) process, it opens itself up to the risk of extended downtime. It is absolutely critical for credit unions to determine how they are going to recover from a vendor goes down, or unable to perform usual business. Business Continuity/Disaster Recovery capabilities should be reviewed to determine if they align with the credit union’s Recovery Time Objectives. Regulators expect credit unions have alternative procedures and processes in place in the event of disruption of service from a mission-critical provider.
Leveraging the skills and experience of third-party service providers can help credit unions better meet their members’ needs while accomplishing their strategic goals. VendorCore is a software that not only manages your vendors with ease, but meets all the compliance requirements.