Ongoing regulatory expectations and competition from Internet banks and unconventional financial services providers may be affecting your financial institution’s ability to reach or exceed its performance goals. But on a positive note, you can add to your bottom line in another way: through vendor contract negotiations.
Seriously, it’s like finding hidden treasure that’s been right under your nose all along. You just need to know how to access it.
Meeting Account Holders’ Needs
As the service delivery paradigm shifts toward digital wallet apps, it’s important to choose vendors that offer products and services that meet consumer expectations for convenience, security and accessibility.
I have worked with many clients to help ensure they are able to make the very best, informed decisions when it comes to choosing a product vendor or renewing a legacy service contract.
Simply signing the bottom line without a careful review of the services provided — or the contract terms — can result in:
- missed opportunities to gain a competitive edge in the market;
- loss of potential savings, increased income and improved contract terms; and
- services that may not meet your account holders’ needs and expectations.
Do You Know Where to Look for Treasure?
For many institutions, signing a new service contract — or renewing an existing one — often becomes a matter of habit. If you are satisfied with the level of service from a vendor, you might not think of the possible benefits of having your contracts reviewed and possibly re-negotiated by a professional.
In my experience, many people do not realize that treasure awaits them if they just could just access the map. They are only familiar with their current pricing, are often unfamiliar with how pricing for services has changed over time and underestimate their cost-savings potential. This puts them at a major disadvantage even if they try to negotiate with vendors on their own.
What’s more, simply letting your contracts auto-renew every time means you miss the chance to explore alternative or lower-priced options that may better fit your institution’s current needs.
That’s where having an expert contract negotiator comes in handy — they know where to find that buried treasure and how to put it into your hands.
For one of our clients — a Midwest financial institution with $1.8 billion in assets — this became clear when the time came to re-negotiate their Internet banking contract. After we secured improved rates for the institution, the client saw an overall savings of 14% over their previous contract. Since then, we have helped them negotiate other contracts — most recently, for their card processing contract review. That endeavor achieved a six-figure savings over the life of the seven-year contract. Checkout more details behind their success story.
Just Think What You Could Do with Additional Income
Given the number of service contracts held by the typical institution, the potential for cost-savings and monetary incentives is tremendous for your competitive position. Savings from a contract review could allow you to invest in updating technology, enhance your service-offerings for account holders, or even expand your business or open new branches.
Get the Most Value with a Professional Contract Review
Whether or not you have in-house contract expertise, a professional audit of your contracts will help to uncover areas where you can find additional savings. And depending on your current agreements, the findings can lead to improved terms, signing bonuses, service upgrades, and increased revenue potential that can offset some of the economic and regulatory challenges you may be facing.
Don’t delay — to get the most competitive offers from your vendors, it’s best to start reviewing your contracts 18-24 months before they expire. Putting a professional review of your service contracts on the back burner can result in the loss of monetary rewards that could help you positively impact the bottom line and improve account holder service.
Your buried treasure awaits — are you ready to claim it?