New tax plan is enabling many banks to invest in technology that helps them be more competitive. Vendor management is leading the way.
At this year’s ABA National Conference for Community Bankers (NCCB), ABA President Rob Nichols discussed how banks are already spending based on savings they’ll see under the new tax plan. According to ABA polling, banks are reinvesting their projected tax savings in their employees, customer growth, philanthropic activities, and technology to help them gain a competitive edge. This is going to put pressure on other banks to invest or get left behind.
This is where a strong vendor management program comes in, since most of these options are going to utilize third-parties. VendorInsight’s data shows that 5% of banks’ third-party spend each year goes to unwanted vendors due to missed notification periods for automatically renewing contracts. To put it in perspective, that’s approximately $187,000/year for a $3 billion asset bank.
Assessing vendor performance through tools like vendor scorecards allows you to compare similar vendors, make informed decisions to consolidate, and get the strongest ROI for your outsourced services. Many banks have multiple vendors providing overlapping services, either to different departments or as part of a similar-but-separate collections of services.
A robust vendor management program also gives banks insight into contract spend, risk and impact for the services contracted to third-parties. This data, along with intuitive reporting, can help highlight where you can maximize ROI through contracted services without increased volatility.
Wouldn’t it be nice if vendor management made your bank more profitable, instead of having it hanging over your head as a challenge when audits and reviews come? Maybe it’s time to consider developing and improving your vendor management program with new software.
Contact us if you’re not sure where to start. VendorInsight® simplifies vendor management.