From contract frustrations to poor relationship management, the time for a core review is now
You don’t change your oil once every 10 years – it’s something that needs to be checked on a regular basis. Your core processing contract is no different. Here are 6 signs that your bank or credit union needs to conduct a core review.
1. You can’t remember when the deal was inked
If your contract is sitting on a shelf collecting dust – it’s time to open up the contract. Negotiating a competitive deal requires your FI to reread and understand what was signed in the contract. It’s ok if the deal was signed 10 years ago, however if a change needs to be made it often takes years of planning to properly execute the transition due to the stipulations of the contract. If you can’t remember when the deal was inked, you aren’t prepared for the timing associated with a core review.
2. The executive that executed the contract has retired
It’s a fact, executives retire or move on to another institution. The new individual in charge of managing the contract may or may not have been involved with the original core selection process. It’s like changing drivers in a car. The car still functions the same way, but mirrors, seats, pedals, steering, may need to be adjusted. Being aware of key dates, pricing, and any addendums that were signed are critical to managing the contract moving forward.
3. Contracts should be set on autopay, NOT auto-renew!
Many use autopay for Netflix, Amazon Prime, or our utility bills. It’s perfectly acceptable to have your core processing bill set on auto-draft. It’s not acceptable to allow your contract to auto-renew. This puts the vendor behind the wheel of the car NOT the financial institution. In a rapidly changing environment, what’s to say that the pricing offered 5-to-10 years ago is still competitive in today’s context? Competition benefits the customer – take advantage of negotiating.
4. You’re wearing “brandcuffs”
We have seen poor vendor behavior exhibited on a regular basis. It should not feel as if you are wearing handcuffs and being put in the back seat. If your organization wants to go with a third-party vendor’s product, the incumbent core vendor should not price the integration in a discriminatory manner so that you can’t afford to make the change. If your wearing “brandcuffs,” it’s a sign you may need a different vendor.
5. Your relationship manager is absent
Only hearing from your relationship manager when the contract has auto- renewed is simply not a relationship. If the only contact with your relationship manager comes once a year at the vendor’s conference, that is also not a relationship. The vendor works for you – not the other way around. A positive relationship manager serves as your advocate and visits you often!
6. If someone asks you why you are with your vendor, and you can’t answer them
Simply staying with your vendor because you have always been with your vendor is dangerous. This is not suggesting that your bank or credit union needs to change vendors, but it is important to understand the market and what products are out there. Technology is always changing and products are continually improving. It should be top of mind why you choose to remain with a particular vendor. If you find yourself asking the question, “why are we with them?” A change may be necessary.
These are just some of the reasons why a core review is important to your bank or credit union. A core review can be simple or comprehensive. In either case – if you need help The Copper River Group is available to guide you through the process and keep you in control of your vendor relationship.