Cost of Vendor Management
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Trust Exchange performed a cost study with several risk professionals and was able to define the annual cost of managing a vendor. Vendor Management for Banks.
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Cost of Vendor Management
- 1. Cost Of Vendor Management Share, Verify and Trust Edward Sullivan, CEO
- 2. The Trust Exchange is a community of businesses who securely disclose and monitor key information to increase their trust in each other. Copyright © 2019 Trust Exchange
- 3. Collaborative Economy Copyright © 2019 Trust Exchange
- 4. 0 2000 4000 6000 8000 10000 12000 14000 16000 18000 20000 2010 2017 Growth Copyright © 2019 Trust Exchange
- 5. Copyright © 2019 Trust Exchange Vendor management is a discipline that enables organizations to control costs, drive service excellence and mitigate risks to gain increased value from their vendors throughout the deal life cycle. -Gartner IT Glossary www.trustexchange.com/cost
- 6. Copyright © 2019 Trust Exchange
- 7. Copyright © 2019 Trust Exchange
- 8. Copyright © 2019 Trust Exchange
- 10. Accelerating Regulatory Pressure to Manage Vendors “Due diligence is the responsibility of the institution, not the examiner.” – FDIC Examiner “Banks right now are not doing enough of their own due diligence. They need to design compliance into all of their relationships.” – IDC “…The buck stops with the bank who engages with that third party...” – Gartner “Due diligence is a risk and compliance obligation.” – FDIC “…Banks should raise red flags before regulators do…” – FDIC Copyright © 2019 Trust Exchange
- 11. Copyright © 2019 Trust Exchange ALL third parties MUST be monitored in a RISK APPROPRIATE manner.
- 12. Vendor Compliance Lifecycle: Monitoring AND Visibility Selection Implementation Compliance Performance Operational Performance Renewal Copyright © 2019 Trust Exchange
- 13. The Survey: The Cost of Compliance
- 14. Copyright © 2019 Trust Exchange Methodology Trust Exchange interviewed several risk personnel at financial institutions ranging from $200 million in assets to $2 Billion in assets. The institutions were rated based on the self-assessed quality of their program and interviews were performed to determine the hard and soft costs of maintaining these programs. If there was a material disparity on quantified tasks performed, the study used the data from the organization with the perceived higher quality results. All content in this report was taken from interview transcripts and followup question and answer sessions. Participants were not compensated for participating in this project. To encourage honest and unfiltered feedback, participants were ensured anonymity. Participant Profile The participants are all responsible for managing their financial institution’s vendor compliance program. The majority of participants reported to either the Chief Financial Officer or Chief Risk Officer. However there were a few that reported into banking operations. $200M to $1.5B 30 Risk Professionals in Mid-Atlantic Region 35 Median number of Vendors
- 15. Copyright © 2019 Trust Exchange Good Old Days
- 16. Copyright © 2019 Trust Exchange New Normal
- 17. Copyright © 2019 Trust Exchange
- 18. Exponential Requirements New Requirements are an Exponential Increase in Activity Current Activity and Cost • Due Diligence • Contract Management • Data Collection • Report Compilation • $500-$1,100/Vendor/Year New Requirements • All of the Above • Objective, Subjective, and Operational Data Monitoring • Visibility throughout enterprise • $2,200-$5,000/Vendor/Year Copyright © 2019 Trust Exchange
- 19. Current Solutions QA by Sampling Hunt to find Red Flags Data is Pulled from Vendor Expensive Reactive Non-Scalable! Copyright © 2019 Trust Exchange
- 20. Copyright © 2019 Trust Exchange What’s the Solution? Nights Weekends Overtime Risk? Compliance Readiness?
- 21. White Paper Download Copyright © 2019 Trust Exchange www.trustexchange.com/cost
- 22. Network-Effect Problem B1 V1 B3B2 BN C1 C2 C3 CN. . . . . . . . . . . . Current Situation Trust Exchange V2 V3 V N V1 V2 V3 V N Copyright © 2019 Trust Exchange
- 23. The Platform
- 24. Dashboard Copyright © 2019 Trust Exchange
- 25. Vendor Profile
- 26. Events Copyright © 2019 Trust Exchange
- 27. Monitoring Rules Copyright © 2019 Trust Exchange
- 28. Results
- 29. First Year Savings Copyright © 2018 Trust Exchange $- $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Old Cost New Cost • 1 $75k FTE 50% Allocated • 10% Allocated after implementation
- 30. 3 Year Cumulative Savings Copyright © 2018 Trust Exchange • 1 FTE • Does NOT include Network Effects, etc. $- $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000 $100,000 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 Cumulative Savings
- 32. Thank you! Copyright © 2017 Trust Exchange
Editor's Notes
- Quick description of company.
- Trust Exchange takes part in the collaborative economy.
- “Our growth. There is a need and there is a community building.” Ed – are you interested in having these logos arranged in a relatively chronological order?
- “Our growth. There is a need and there is a community building.” Ed – are you interested in having these logos arranged in a relatively chronological order?
- “Our growth. There is a need and there is a community building.” Ed – are you interested in having these logos arranged in a relatively chronological order?
- “Our growth. There is a need and there is a community building.” Ed – are you interested in having these logos arranged in a relatively chronological order?
- “Our growth. There is a need and there is a community building.” Ed – are you interested in having these logos arranged in a relatively chronological order?
- Banking – Use Case
- Banking – Use Case
- Don’t think of Third Parties as a liability…think of them as assets. Vendor management is assett management
- Banking – Use Case The process – It’s constant and requires a lot of maintenance.
- The Use Case used in the deck was Banking. I’d recommend keeping continuity in your deck story by showing a Banking sample (you can create a mock version with fake stats). It will help your viewers to understand what your platform provides for the problems you mentioned for Banking earlier.
- The Use Case used in the deck was Banking. I’d recommend keeping continuity in your deck story by showing a Banking sample (you can create a mock version with fake stats). It will help your viewers to understand what your platform provides for the problems you mentioned for Banking earlier.
- The Use Case used in the deck was Banking. I’d recommend keeping continuity in your deck story by showing a Banking sample (you can create a mock version with fake stats). It will help your viewers to understand what your platform provides for the problems you mentioned for Banking earlier.
- How it’s gotten more tedious.
- ”The Pain” Slide
- The Use Case used in the deck was Banking. I’d recommend keeping continuity in your deck story by showing a Banking sample (you can create a mock version with fake stats). It will help your viewers to understand what your platform provides for the problems you mentioned for Banking earlier.
- The Use Case used in the deck was Banking. I’d recommend keeping continuity in your deck story by showing a Banking sample (you can create a mock version with fake stats). It will help your viewers to understand what your platform provides for the problems you mentioned for Banking earlier.
- The Use Case used in the deck was Banking. I’d recommend keeping continuity in your deck story by showing a Banking sample (you can create a mock version with fake stats). It will help your viewers to understand what your platform provides for the problems you mentioned for Banking earlier.
- Showcasing the vendor profile page first. How would their company page look like. Take time to explain the platform. We can add builds/animations on top that boxes out the different sections/features.
- Added a questions slide.
- The Use Case used in the deck was Banking. I’d recommend keeping continuity in your deck story by showing a Banking sample (you can create a mock version with fake stats). It will help your viewers to understand what your platform provides for the problems you mentioned for Banking earlier.
- The Use Case used in the deck was Banking. I’d recommend keeping continuity in your deck story by showing a Banking sample (you can create a mock version with fake stats). It will help your viewers to understand what your platform provides for the problems you mentioned for Banking earlier.
- Added a questions slide.