Ncontracts

Erin Goodall, vice president and director of compliance at Valliance Bank, was the sole member of the compliance team. She was responsible for analyzing all the bank’s fair lending data to identify redlining, disparities, and any potential violations of the Community Reinvestment Act (CRA), Home Mortgage Disclosure Act (HMDA) and other laws. This was a time-consuming process, taking up to 96 hours per quarter, in addition to her general compliance responsibilities. She also had to decipher what the results meant and spent hours creating reports to explain the insights to the board, management, and compliance committees.

The credit union was facing several challenges in managing its vendors. The existing vendor management system was only used by two people in the ERM department to conduct an annual risk assessment. It lacked the functionality needed to properly manage vendor due diligence, including summarizing contracts and their costs. As a result, the credit union’s operation was inefficient and was often missing key contract provisions. One full-time employee spent half her time managing 30-40 vendors, while the compliance officer in the risk department spent a large percentage of her time chasing the due diligence materials required for annual reviews, with no time for in-depth due diligence reviews.

Extraco Banks, a $1.4 billion-asset bank based in Waco, Texas, was facing a challenge with its vendor management. The bank was concerned about unwanted auto-renewals slipping through the cracks and needed a way to organize contracts scattered across the bank. This was also important for exam preparation and to support the bank’s LEAN initiative. The task of finding a solution fell to the manager of Extraco Banks’ LEAN initiative, who wanted a way to digitize and centralize vendor management.

The internal audit director at a $600 million-asset credit union was tasked with getting vendor management on track at five different financial institutions, ranging from a $90 million-asset institution to one with over $1 billion in assets. The common vendor management issues encountered included expensive autorenewals wasting money, lost contracts, no centralized vendor list or documentation, and overlooked vendor risk assessments. Managers were frequently overwhelmed with contracts, spending hours trying to decipher everything in the contracts.

First Financial Bank, a growing community bank with $16 billion in assets, was facing challenges in understanding the Community Reinvestment Act (CRA) implications of new markets as it expanded. The bank had to analyze demographic and census information and learn about the new communities it served. It also had to understand how adding these new markets to its marketplace impacted its overall CRA performance. The bank needed to compare its performance with peers, ensure it was serving all assessment areas, and ascertain if its staffing was adequate for the needs of the community. This was a significant task for a large institution with over 150 branches and 2,000 employees. Data came from various lines of business at the bank, including mortgage, commercial, consumer, agriculture, and real estate lending, and all of it had to be reviewed. The bank was also navigating a changing regulatory environment with new requirements and expectations.

BancorpSouth, a rapidly growing community bank with approximately 280 locations, did not have a centralized vendor management program until 2016. Instead, individual relationship owners across the bank's footprint were responsible for contract management and due diligence. The bank needed a software and services solution to centralize thousands of vendor relationships and improve tracking of regulator and audit findings. The bank also wanted to save time and money by identifying and preventing auto-renewals and ensuring that bank-specific vendor documents are used.

The $1 billion-asset credit union was looking to create an enterprise risk management (ERM) function, including compliance and internal audit, and needed a solution that would address all elements of risk management. However, their current vendor management solution, Venminder, was a stand-alone product that couldn’t integrate into any other solutions and presented other issues. The credit union struggled with sluggish vendor onboarding and vendor-owners wasted hours trying to collect and review vendor documentation in an effort to limit costs. The reports generated were not always accurate, which raised red flags for the credit union.

In 2019, Citizens National Bank realized they had outgrown the IT-built intranet they’d been using for several years. It simply served as a document repository without the option to categorize or search the contents. Communicating to all employees was also cumbersome. The bank did not allow employees to send emails to all employees; so when an important communication needed to be sent, employees had to forward such information to someone who was enabled to send to all. Digitizing the bank and improving the ability to do more with digital assets became a primary focus.

Lafayette Federal Credit Union, a smaller credit union based in Rockville, Maryland, relies heavily on third-party vendors. Over the years, regulators have shown increasing interest in how Lafayette manages these relationships, especially with critical vendors. The credit union was in need of a more efficient solution to manage the growing volume and complexity of vendor management, while trying to limit expenses. The challenge was to find a cost-effective solution that could handle the increasing volume and complexity of vendor management.

CBC Federal Credit Union was using multiple systems for vendor management, risk management, business continuity, and audit. This resulted in a managerial and administrative headache for the vice president of enterprise risk management and his staff. Each month, they would spend hours on reporting, trying to get a clear picture of risk by adding together all the pieces. They would generate reports from their vendor management platform and risk management platform, take audit findings from their audit platform, and then try to figure out how to connect the dots of these systems. They would then make their own reports on Excel spreadsheets and Word templates.

Rockland Trust, a bank with a mix of commercial and consumer loans in Massachusetts and Rhode Island, has grown significantly over the past decade, acquiring several banks and expanding its loan portfolio. With continued regulator and examiner scrutiny of banks’ Reasonably Expected Market Area (REMA), Allen Bernier, vice president compliance and fair lending officer at Rockland Trust, wanted to ensure his institution was taking all the necessary steps to ensure compliance. One of his chief tasks is ensuring that his bank doesn’t have unchecked Redlining risk. When using a competitor’s HMDA product, Bernier’s team would spend all day tweaking data and working on the formulas. This left them with very little time to focus on analyzing the most important thing—what the data actually meant.