Why is vendor management a critical issue in financial services?
Vendors and suppliers play a crucial role in financial organizations, helping them to fulfill their true potential. But working with vendors does open organizations up to a degree of risk. For those working in financial services, key risks revolve around issues of compliance with the strict regulations that govern financial sectors.
When it comes to compliance, effective vendor management is of the utmost importance. Not only does it allow organizations to ensure vendors are keeping risks to a minimum, it also helps companies avoid or minimize other exposures. Those could result from issues such as data breaches, criminal cybersecurity attacks, or simply because of information accidentally slipping through the cracks. Any number of situations can expose an institution to risk – and the resultant problems can quickly spiral out of control. Just two high-profile examples?
- Scottrade Bank admitted a data breach exposing the personal information of 20,000 of customers was due to a third-party vendor uploading a file to a server lacking sufficient cybersecurity safeguards.
- Italian bank UniCredit had its accounts hacked through a third-party vendor, leading to exposure of 400,000 customer loan accounts.
In an age where your own employees and vendors are working remotely, monitoring vendor risk becomes even more important – and difficult, unless you’ve deployed the proper technology.
Detecting vendor risk before it’s too late
Comprehensive vendor management software for financial institutions allows them to avoid unnecessary risks and monitor the exposure involved in all decisions. Risk and compliance teams can then keep an eye on potential dangers and act quickly if problems arise.
With vendor management software, financial institutions reap the benefits of scalable risk management for all third and fourth parties. Companies can make use of the software to fulfill all of their regulatory requirements, while simultaneously paving the way for future growth.
A vendor management software solution empowers those working in the financial industry to protect themselves against third-party compliance risks that might expose them to regulatory scrutiny and penalties. Organizations are better equipped to deliver everything that’s expected of them, meeting regulatory guidance throughout the country they operate in – and in multiple nations, if required. Here’s how it works.
What features should vendor management software for financial institutions provide?
The opportunities for applying vendor management software are plentiful. With the best systems, there are plenty of advanced features vendor management software can supply that benefit financial services firms.
Ease of adoption to drive compliance
A user-friendly, intuitive dashboard can put all the power in the hands of team members. The ease of SaaS adoption and use seen in the best systems ensures that staff can keep track of the whole vendor landscape with ease. Instead of being practically blind to emerging risks, they can see them well in advance of trouble.
Faster, smarter processes and reporting
Vendor management software helps financial institutions save time and money by improving efficiency. The software can be used to centrally manage contracts, documentation, vendor risk analysis reports, and much more. With these tasks quickly taken care of, employees have far more time to focus on more profitable responsibilities.
Automated alerts spring into action whenever vendor risk strays beyond thresholds that you deem to be acceptable. If this happens, risk management teams will be notified immediately. Risk managers can then take proactive steps to reduce risk as soon as it becomes unreasonable, putting a stop to potential issues further down the line.
The key benefits of vendor management
software for financial institutions
Vendor management software gives full visibility over all operations. Data and documents can be managed through one, centralized system which is easily accessible by all those who need to see it.
Greater visibility and automation of risk detection and response processes helps organizations to mitigate both internal and external risks. Enhanced monitoring allows financial businesses to control any exposures and monitor potential compliance risks over time.
Organizations can easily keep track of content and data, ensuring records are kept to the required standard for all regulatory bodies. Records can be viewed, stored and accessed conveniently.
Automation is the key to improving efficiency and fulfilling operational potential. With vendor management software, companies can rapidly enhance their capabilities by using automated workflows that make risk mitigation far simpler and faster.
Avoid costs and damage from your vendor network
Vendor management software offers a helping hand to financial institutions, reducing the risks that could have damaging consequences. Teams can keep an eye on third- and fourth-party risks via a user-friendly dashboard, and fully visualize the degree of risk involved in ongoing projects across the entire vendor network. Should risks stray beyond the pre-set boundaries of their risk appetite, you can take steps to mitigate them before they result in costs, penalties, or reputational damage.
Cutting-edge vendor management software provides a whole host of reporting benefits, saving staff time by automating vendor contract management, risk analysis reports, and much more.
With vendor management software, growing risks can be detected early. Alerts help to ensure teams are fully aware of increasing risks so they’re ready to take action if necessary. This gives teams the reassurance to focus on other responsibilities, knowing how any potential problems will be detected immediately.