Vendor management has become increasingly complex for credit unions throughout the years. With the ever-growing number of suppliers in the vendor pool, the increased time and regulatory burdens associated with effective vendor management, nationwide labor shortage issues, and an increase in business closures because of COVID and lingering inflation, more credit unions are finding value in outsourcing their vendor management responsibility to a third party.
The benefits a credit union can access by outsourcing vendor management and regulatory due diligence are many. Here are a few to review if your credit union is considering a partnership.
- Increased Informational Integrity – With a growing number of vendors necessary for a credit union to operate, it can become overwhelming and time consuming to keep all company information and contracts up to date. A third-party vendor management company will ensure the verification of your due diligence. This gives your credit union an extra set of eyes on your supplier documentation and contracts, strengthening the legitimacy and validity of the process and increasing the integrity of the information across your supplier database.
- Strengthened Vendor Portfolio – Equally important to maintaining high integrity of your supplier information is ensuring each company within your vendor portfolio is solid, reputable, and financially strong. Vendor management firms will help you to verify critical benchmarks such as your suppliers’ finances, compliance ratings, IT protocols, security protocols, and more. They can also help you make partnership decisions based on their database of industry vendors and performance ratings, strengthening your vendor portfolio and, in turn, your credit union operations.
- Regulatory & Operational Relief – Vendor management is operations heavy and extremely time consuming. This, coupled with the growing expectations of credit union examiners when it comes to vendor documentation and due diligence, makes it difficult to keep up with the tasks effectively. Outsourcing the responsibilities to a third party who knows what examiners are looking for is not only cost-effective, but also allows you to reallocate your staff members to more revenue generating duties and to serving your members.
- Elevated Contract Management – Getting your vendor contracts right prior to service is critical, as is ensuring the vendors are living up to their obligations throughout the relationship. A vendor management company can review your contracts to ensure the language is accurate, responsibilities are clearly delineated for each party (and adhered to), pricing is fair, and renewal policies are reviewed prior to associated deadlines. They can also help you negotiate better pricing to realize cost savings and pay much needed attention to key areas such as confidentiality and non-compete clauses.
- Business Continuity & Resumption – Vendor management companies will collaborate with your vendors to ensure the necessary business continuity procedures are in place should something interrupt the supply chain process such as a weather event. Should an event occur that interrupts your operation, vendor management firms can quickly step in to communicate with your suppliers on your behalf to reestablish connections and resume business.
- Risk Control – Throughout a relationship, your vendors must be meticulously watched and graded for risks that could damage the organization such as compliance breaches, data security concerns, or even failure to deliver service that may result in the interruption of a credit union’s operations. Third party firms can monitor and measure the performance of your suppliers in these areas and against other key performance indicators (KPIs).
- Knowledge & Resources – Perhaps the best part of outsourcing your vendor management is the access you can get to industry experts and educational tools. Vendor management companies must remain abreast of the latest regulatory requirements and industry practices to help you and other credit unions. As a client, you not only get access to their consultative expertise, but also to the tools, templates, and resources they offer to help you tackle challenging tasks such as limited reviews and contract negotiations.
CUVM provides comprehensive vendor management solutions to 230+ companies in over 35 states and has served the credit union industry for more than 14 years. As a proud partner to Sheriff’s Central and strategic alliance provider to CUNA, CUVM offers a holistic approach to managing contracts that takes the burden off credit unions, all while offering a cost-effective and dependable way to manage regulatory due diligence. Interested in learning more about how outsourcing vendor management could help your credit union? Contact CUVM today.