Pub. 12 2021 Issue 1

www.wvbankers.org 18 West Virginia Banker Core Processing Tips for Selecting Your Next Vendor C ore processing and the associated fintech ancillary sys- tems remains one of the top three costs within most banks. Core evaluations no longer involve the natural progression of rubber-stamping the incumbent vendor’s re- newal contract every five to seven years. When implementing “best of breed” ancillary solutions, organizations can become overwhelmed with these software decisions. The complexity and far-reaching effects of signing a core pro- cessing vendor contract often lead to a great deal of internal stress. Many important buying strategies are often neglected or forgotten in the heat of the decision-making process. We have seen these areas overlooked even by multibillion-dollar institutions and the best-educated negotiators. The following core negotiation strategies will help your bank negotiate the best price and ensure the best service. Detail your Company’s Requirements As in any evaluation process, you must first start by docu- menting your requirements and workflow. It is imperative that the core processing vendor clearly understand your expecta- tions, processing windows, volumes, specifications, etc. If the vendor does not precisely understand your requirements, this could lead to higher-than-expected prices and unattainable service levels. This first step of writing down your specifica- tions will also act as the building block for your request for proposal (RFP). Set a Realistic Decision Time Frame As the old saying goes, “If you fail to plan, you plan to fail.” We have observed multibillion-dollar institutions fail to set up a strict decision time frame. Organizations that randomly start and stop core processing evaluations waste significant resourc- es and can cause other negative outcomes that include: • The project can drag on for 12 to 18 months with little accomplished. • Technology will change and thus cause the evaluation to start again from or near the beginning. • After picking up and putting down the project informa- tion, the evaluation team will become either utterly con- fused about product features and functionality or waste time by continually re-educating themselves. The best way to plan for a final decision date is to work back- ward from your desired live date. Daily distractions, “fires,” vacation and sick time will arise during the decision period. By Greg Schratwieser, ICI Consulting