Q4 2021 hedge fund letters, conferences and more The Special Situation Funds standard, the MSCI World USD Index, returned 4.3% for Read MoreBut while reputable third-party suppliers for banks are vital to success, the procurement procedure isnt inexpensive or basic. After releasing an RFI or RFP, procurement groups normally invest months poring over propositions, getting involved in item demos, evaluating security functions, negotiating with vendors, drawing up contracts, and performing other diligence activities before ultimately making a purchase.
And the overhead associated with the large teams of workers needed to manage such expensive relationships makes partnerships with third-party vendors for banks even more expensive. It must likewise be kept in mind that partnering with a small supplier can mean running through the very same procurement process as partnering with a big vendor.
Banks can therefore attain significant expense savings by consolidating their third-party vendor partnerships. As more banking leaders recognize this, theyre driving an industry-wide pattern towards vendor debt consolidation.
The Flooded Regtech Marketplace
While some banks may decide to develop regulative compliance options internally, lots of will seek assistance from third-party vendors. Such is the case right now in the regtech market, which means a vendor procurement team seeking compliance software application to comply with a brand-new guideline may experience dozens of special vendors.
While theres no shortage of vendors offering specific niche items to help banks manage specific obstacles, banks should look beyond niche offerings as regulations grow in number and end up being more complex. Such organizations undoubtedly desire more from their existing vendors in the hopes they can consolidate workflows and information with a smaller sized number of trusted partners– therefore attaining expense savings, workflow performances, and much better data management.
Less Vendors, More Productivity
The most noticeable benefits of supplier debt consolidation may be those taken pleasure in by end users. Employee workflows provided on a single multifunctional regtech platform will be greatly more efficient than those utilizing five diverse systems to satisfy the exact same procedures. In the latter case, staff members will need to spend more time training, more time performing repeated manual data-entry jobs, and more time logging in and out of different platforms. This will not just lead to worker disappointment; it will likewise produce more chances for human error. Banks that work to lower the burden on personnel members will see increases in both employee fulfillment and tech adoption while lowering compliance dangers and instances of unsatisfied responsibilities. Supplying a combined platform to end users produces a consistent experience thats simple to use and instinctive across all workflows. This is essential in getting adoption amongst that community. Because if the experience is too challenging, disjointed, and unintuitive, users will be turned off by the software and merely wont utilize it.
The Data Dilemma
The capability to use and handle information effectively is critical to a banks survival, and a reliance on a vast network of third-party vendors for banks can make that challenging. When a firm has multiple third-party suppliers– with data sitting in different databases and systems– theres no way to connect them without bringing the data in-house.
If an employee compliance workflow includes five different platforms from special vendors– say, one for handling staff member trading approvals, one for training, etc– then employee information will be distributed across those platforms. A bank relying on all those vendors is completely accountable for aggregating employee details across each platform.
A bank that can count on one supplier, or a little choice of relied on and scalable suppliers, to power its staff member compliance-related activities will get considerable competitive advantages. With worker information stored centrally, creating reporting and analytics are much easier, audit routes are more transparent, and details throughout the firm flows more efficiently and totally.
Vendor consolidation yields the often-noted cost savings and workflow performances, and it permits more effective information management: an immediate advantage that compounds in time. With aggregated information from fewer however more detailed products, banks can invest more money and time in impactful, high-value chances to separate themselves from rivals instead of sinking valuable money, time, and associated firm resources into product procurement and application.
About the Author
As CEO of StarCompliance, Jennifer Sun is accountable for driving the companys direction and development technique. With 20 years of executive experience in the monetary services and innovation space, she leads Star to empower companies to achieve regulatory compliance while safeguarding their integrity and business track records.
Upgraded on Jan 13, 2022, 11:24 am
As company designs in financial services grow significantly complex, banks rely increasingly more on third-party suppliers for their internal procedures. Today, a multinational bank might partner with thousands of distinct vendors to support its various line of work.
Q4 2021 hedge fund letters, conferences and more The Special Situation Funds benchmark, the MSCI World USD Index, returned 4.3% for Read MoreBut while trustworthy third-party suppliers for banks are important to success, the procurement procedure isnt simple or low-cost. It must likewise be kept in mind that partnering with a little vendor can mean running through the same procurement procedure as partnering with a large supplier. Such is the case right now in the regtech marketplace, which suggests a vendor procurement group looking for compliance software to comply with a brand-new policy might come across dozens of unique vendors.
The capability to use and manage information effectively is important to a banks survival, and a reliance on a vast network of third-party vendors for banks can make that tough. A bank relying on all those vendors is completely accountable for aggregating employee information throughout each platform.
