Discover how too many vendors impact your financial institution or business. Boost efficiency by partnering with a single trusted vendor for streamlined risk management and simplified processes.
3 main reasons to consolidate to one secure service partner:
- Efficiency: One quality vendor for everything means one phone number, one email address, one secure online interface to manage all your equipment and services.
- Security Integration: When your security can integrate with your ATM Fleet, the solutions are endless. This is CSG's "with a twist."
- Savings: By bundling you can typically save both time and money. That can translate to thousands of dollars over time.
View our Vendor Risk Management checklist.
How many vendors do you manage and does your bank or credit union feel the pain?
Having too many vendors not only impacts profits and budgets but also prevents efficiency. Plus managing an overload of different vendors can be exhausting, labor intensive, and a time suck. Having too many vendors can lead to several operational, financial, and strategic challenges for an organization:
- Increased Complexity: Managing multiple vendors means coordinating with various contracts, performance metrics, and communication channels. This can complicate procurement, logistics, and operations, leading to inefficiencies.
- Higher Administrative Costs: Each vendor relationship requires time and resources for management, including contract negotiation, invoicing, and vendor performance tracking. More vendors mean more resources are needed to handle these processes, which can drive up administrative costs.
- Fragmented Communication: With many vendors involved, there’s a greater risk of communication breakdowns, especially if information is siloed across different vendors. This can result in delays, misunderstandings, and inconsistent service quality.
- Security and Compliance Risks: Every vendor relationship can potentially expose the organization to security and compliance risks. Each additional vendor increases the number of access points to sensitive data and operations, heightening the risk of breaches or regulatory non-compliance.
- Loss of Bargaining Power: With spending spread across many vendors, the organization may lose the leverage that comes from consolidating purchases with fewer providers. This can lead to less favorable pricing and terms.
- Reduced Strategic Focus: A multitude of vendors may distract from the organization’s core goals. Decision-makers might spend more time managing vendors rather than focusing on strategic growth initiatives or customer needs.
- Quality Control Challenges: Ensuring consistent quality becomes harder with more vendors, as they may vary in standards, reliability, and expertise. Inconsistent quality can lead to customer dissatisfaction or disruptions in service delivery.
Organizations often benefit from finding an optimal balance of vendors and offerings. This approach allows for better control, streamlined processes, and often more strategic partnerships.
What if one vendor could provide all the services you need? Banking Simplified | View Infographic
Why should your Bank or Credit Union consider consolidating to one Vendor?
Using a single vendor can bring several key advantages to an organization, especially in terms of simplicity, cost-effectiveness, and strategic alignment. Here are some of the main benefits:
- Simplified Management: Working with one vendor streamlines communication, billing, performance tracking, and contract management. This reduces administrative workload, saving time and resources.
- Cost Savings: Concentrating purchases with one vendor often enables bulk discounts, volume-based pricing, or loyalty incentives. Additionally, it reduces hidden costs related to managing multiple vendor relationships, like contract negotiations and vendor onboarding.
- Enhanced Vendor Relationship: A single-vendor relationship allows for deeper collaboration and stronger partnership-building. The vendor may be more invested in understanding and meeting your organization’s specific needs, leading to more tailored services and support.
- Improved Quality and Consistency: With one vendor, there’s more consistency in product or service quality, as standards don’t vary across multiple providers. This reduces the likelihood of disruptions and helps maintain a consistent brand experience for customers.
- Better Accountability: When one vendor is responsible for delivering services or products, it’s easier to hold them accountable. There’s no ambiguity about who’s responsible for an issue, so problems can be resolved more efficiently.
- Streamlined Technology and Integration: Many vendors offer integrated solutions that work seamlessly together within their ecosystem, eliminating compatibility issues and simplifying troubleshooting. This is particularly valuable in areas like software, where different systems need to communicate effectively.
- Increased Agility: Decision-making and issue resolution are often faster when working with one vendor, as there are fewer dependencies and less complexity. This agility can be crucial in industries that require quick adaptations or responses to market changes.
- Stronger Data Security and Compliance: Managing data security, privacy, and compliance requirements is often simpler with one trusted vendor, reducing the risk of breaches associated with multiple access points or varying compliance practices.
However, make sure the single vendor is a trusted partner. Balancing these factors carefully can maximize the benefits of single-vendor relationships while mitigating potential downsides.
Vendor Due Diligence is extremely important, especially with today’s cyber security risk landscape.
Many vendors are not vetted correctly and don’t comply with federal regulations and hold the proper licenses or security certifications. Have you performed vendor due diligence lately?
Three primary areas when performing vendor due diligence:
1. Trusted Partner Values that match your institution's
- Deep understanding of the financial institutions culture and expectations
- Provide training in technology trends and product research and development
- Knowledge of financial institution’s compliance requirements, risk landscape, and industry standards
- Quarterly service level reporting and preventative maintenance tracking
- Effective management of sub-contractors
- Provide equipment tracking and budgeting support and 5-year technology road-map development
2. Risk Compliance & Legal Certifications are a non-negotiable
- Soc 2 Type 2 certification reports are an industry standard
- Proof of insurance & liability including a minimum of $5 million
- Laptops & devices are audited, secured and encrypted
- Employee and subcontractor background checks and drug testing
- Business continuity plan (I.e. Effective work from home policies and pandemic protection strategies)
- Industry experts with professional certifications on staff
- Compliance with all federal, state, and technical industry certification requirements
3. Innovative Automation & Secure Remote Technologies to future-proof efficiency
- Multiple non-proprietary solutions representing different brands
- Open architecture with integration capability and encryption
- Solution targeting customer pain points
- Platform creep reduction strategies (reducing the number of at-risk platforms/systems)
- Performance and efficiency improvements
- FTE efficiency or reduction through technology or managed services
- Technology migration and conversion experts
- Guide the implementation of AI & analytics
How do equipment risk assessments protect bank, credit unions, and other highly regulated facilities?
All-Inclusive Service Agreements with 30 day out, no penalty clause can provide a combination of strict SLAs and freedom of choice if needed.
If you do find yourself with too many vendors even after performing vendor due diligence, one way to make sure you are receiving superior service but still provide an exit strategy is negotiating an all inclusive service agreement with a 30 day out no penalty clause. This can provide the firm SLAs your institution requires for service and also the flexibility to switch providers if necessary. Essentially this is like having no-contracts, but still have an SLA to lay everything out. This also requires the vendor to “earn your trust” everyday by providing extraordinary service both physically onsite, remotely using managed services and providing a seamless secure online interface.
