5. 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 that problems can be resolved more efficiently. 6. Streamlined Technology and Integration: Many vendors offer integrated solutions that work seamlessly within their ecosystem, eliminating compatibility issues and simplifying troubleshooting. This is particularly valuable in areas like software, where different systems need to communicate effectively. 7. 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. 8. 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 cybersecurity risk landscape. Many vendors are not vetted correctly, don’t comply with federal regulations and do not hold the proper licenses or security certifications. Have you performed vendor due diligence lately? The following are three primary areas to consider when performing vendor due diligence: 1. Trusted Partner Values That Match Your Institution’s • Deep understanding of the financial institution’s 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 subcontractors. • Provide equipment tracking and budgeting support and five-year technology road-map development. 2. Risk Compliance and Legal Certifications Are a Non-Negotiable • Soc 2 Type 2 certification reports are an industry standard. • Proof of insurance and liability, including a minimum of $5 million. • Laptops and 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 and 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 and analytics. If you find yourself with too many vendors even after performing vendor due diligence, one way to ensure 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 the flexibility to switch providers if necessary. Essentially, this is like having no contracts but still having an SLA to lay everything out. This also requires the vendor to earn your trust daily by providing extraordinary service both physically onsite and remotely, using managed services and providing a seamless, secure online interface. Vendor due diligence is extremely important, especially with today’s cybersecurity risk landscape. 14 | INDEPENDENT REPORT
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