Meeting FFIEC Guidelines for Management of Strategic Vendors requires a vendor management process to measure and audit all strategic vendors in every area of the institution (Finance, Operations, Technology, Facilities, etc.).
The Service Level Agreements (SLA) within each contract need to be examined for the following items:
-Contractual term and renewal steps
-Timeframes or measurements for delivery of products or services
-Provisions for handling errors, omissions, or outages
-Credits from the vendor for not meeting the agreed-upon Service Levels
-Contract cancellation process
This exercise needs to be implemented on a scheduled basis by industry-experienced professionals who examine each vendor’s current financial status, market segment and risk assessment. Most financial institutions, faced with more immediate priorities, do not have the internal resources to allocate to this process.