Banks are increasingly looking to external vendors to procure services, equipment and technology. When adequately managed, these relationships can provide a competitive edge for the bank. Improperly managed, these activities can increase a bank's risk profile significantly. Risks typically arise from insufficient due diligence, inadequate control environments and a lack of oversight and supervision by the bank and poor performance, inadequate resources, and deficient management and control environments by the vendor.

Risk Management Features Address :

• Operational Risk - Operational risk not only includes operations and transaction processing, but also areas such as customer service, Information Technology security and the protection of non-public data, systems development and support programs, internal control processes, and capacity and contingency planning.



• Reputation Risk - Errors, delays, or omissions in outsourced services that become public knowledge or directly affect the bank's customers can significantly affect reputation. For example, a vendor's failure to maintain adequate service levels and contingencies for key items such as cash deliveries, network hardware devices or ATM servicing could disrupt the ability to deliver service to customers.



• Strategic Risk - Inadequate management experience and expertise can lead to a lack of understanding of key risks facing the industry today and into the future. Additionally, inaccurate information from vendors can cause the bank's management and board of directors to make poor strategic decisions.



• Compliance (Legal) Risk - Outsourced activities that fail to comply with legal or regulatory requirements can subject the bank to legal sanctions. For example, inaccurate or untimely consumer compliance disclosures or unauthorized disclosure of confidential customer information could expose the bank to civil money penalties or litigation.



• Interest Rate, Liquidity, and Price (Market) Risk - Processing errors related to investment income or repayment assumptions could lead the bank to make unwise investment or liquidity decisions, thereby increasing market risks.

VendorINSIGHT™ helps address these risks by providing unbiased information regarding your vendors and by providing access to centrally stored vendor monitoring documents, private vendor documents, alerts, reports and contract information.