Financial Institutions should ask these questions about their tech provider
Every time financial institutions see how much they are paying for their core processing, they wonder if it’s too high.
Here a few questions that may help you determine if you are paying too much.
1. Does your contract have an automatic price increase every year?
2. Did you just receive a notice of a price increase and have a hard time figuring out what product improvements have been implemented by your vendor that cover this price increase?
3. Have you had a face-to-face visit with your account or relationship manager in the last twelve months?
4. Do you receive more price increase notices or sales brochures from your vendor than account or relationship manager visits?
5. When the account or relationship manager visited you last, were they prepared for the visit by knowing:
- a. The asset size of your institution?
- b. How much you are paying their company each month?
- c. What specific products you had installed and are currently using?
- d. The help desk calls or the customer service cases open and closed in the last year?
- e. Propose a training solution that would help your staff resolve more of the customer service and help desk calls?
6. Does your relationship or account manager have twenty or more other client relationships in addition to you?
7. Has your service to your own customers been declining?
8. Do you receive the needed answer from the vendor help desk hours after your customer has left your lobby?
If your answers reflect less than stellar service from your vendor, our suggestion is that you are paying too much!
Contracts bind, but don’t help
Too often we observe “sign-and-forget” vendor-client relationships. Shortly after the contract has been signed or renewed, the interest and attention from the vendor wanes. It has been reported to us that service levels and customer satisfaction begins to decline six months after a renewal and 12 months after a conversion.
Long-term contracts that include Service Level Agreements (SLAs) have no teeth in them (for you to use) and tend to breed complacency. They have you and if you have bad customer service it is your fault, not theirs. Furthermore, the vendor will enforce the contract. Note: if you agreed to an annual price increase in the contract, they don’t have to earn it!
Ultimately, your vendor contract is the blueprint for a successful or a disappointing relationship. Dissatisfied with your contract, send your key vendors a contract non-renewal letter and make the vendor earn your business by proving that they know yours.
Ultimately it comes down to this: Does your vendor treat your community bank like you treat your bank customers? If they don’t, maybe they don’t know your business and maybe it’s time to move on or at least reprice.