The Hassle-Free Way to Bank Vendor Management and Regulatory Compliance

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The average bank in the United States does business with nearly 100 vendors ranging from core processors to companies who mow the lawn or shovel the snow. Building relationships with vendors is key to running a successful institution. But, managing the vendor due diligence process can be a hassle and time consuming but it doesn’t have to be that way.

Like a lot of bank processes vendor management is sometimes outsourced to third parties and the fees associated with can be hefty. At the other end of the spectrum some financial institutions build their own excel spreadsheet and the process is handled in-house.

Strunk’s inexpensive Vendor Manager Solution provides two key elements to managing vendors:

1) provides a repository for all information relating to each vendor and

2) allows the bank to do regulatory required risk assessments on a consistent basis.

The tool keeps critical information such as financial statements, insurance documentation, contracts and service level agreements and provides a tickler system to notify bank personnel when updated documents are needed.

The risk assessor tool helps a bank determine what level of risk the vendor exposes the bank to: critical, high, moderate or low. In the case where the vendor is a critical or high risk, more documentation is required from the vendor to do a full assessment per regulatory requirements. The solution helps you assess the risk in an easy to use manner.

Contact Strunk at 800.728.3116 or email at info@strunkaccess.com to learn how our comprehensive but inexpensive Vendor Manager tool can help your bank.

Utilizing a Pricing Model Can Help Your Community Bank Increase Profitability and Earn More Business

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Bankers meticulously assess a borrower’s creditworthiness—standards we would never consider compromising on. Yet, when it comes to pricing decisions, a thorough evaluation of profitability often isn’t part of the equation.

The Flaw in Current Pricing Methods

The biggest problem facing virtually every community bank in the country is a widespread mispricing trend: we typically overprice our largest, most profitable customers and underprice our smallest, least profitable ones. This isn’t done intentionally; the methodology and processes most banks have in place unintentionally lead to this unfavorable result.

In turn, this approach unintentionally puts the bank at risk with its best customers—who may leave for better rates—and causes the bank to miss opportunities to maximize profitability with the least profitable ones.

A robust pricing solution is essential. It allows banks to quickly and easily see where they can price more aggressively to secure new business or maintain important customer relationships. Simultaneously, it shows where they need to price up to ensure the bank is appropriately compensated for the work it does. On deals that historically lose money, a pricing solution can even help the bank lose less.

Competing with the Mega Banks

Large regional and mega banks operate with their own very advanced, sophisticated internal pricing models. These tools allow them to view every deal in the context of the entire client relationship, not in isolation. These applications aggregate all current and future expected revenue from a client across all departments. This sophisticated view allows them to “cherry-pick” by illustrating that the bank can afford to aggressively lower the rate on one product to secure massive profits on another, ensuring they win both pieces of business. Strunk’s solution brings this same kind of power to the community bank.

Strunk’s Pricing Manager: The Solution

Strunk’s Pricing Manager is a full-featured loan and deposit pricing solution and relationship profitability tool that helps community banks win more business and increase profitability. Pricing tools do not tell lenders what to do or make decisions on their behalf; rather, they provide additional information that allows lenders to make a more informed decision and to more effectively compete.

We ask bankers to consider how pricing is set today and to let us show them how our solution will help identify the true drivers of profitability at their bank. Strunk focuses heavily on gaining lender buy-in so that the tool will be properly and effectively implemented with the entire lending team.

Relationship-Focused Insight

The solution provides lenders with valuable relationship information, which includes all loans and deposits, for a full picture of profitability.

  • Loans can be priced individually, or users are able to build out a relationship that includes all of the customer’s loans and deposits.
  • Return on Equity (ROE) targets are provided for both the loan-only perspective and the full relationship view.
  • The relationship view is particularly beneficial as it provides a historical look into how well the bank has done with a particular customer in terms of profitability, since all prior loans for that customer are included. This allows the user to see how profitable each decision has been regardless of when it was made.
  • You can quickly determine: “have we historically met or exceeded our targets with this particular customer – or – have we typically come up short?”. This is an important consideration when making the next pricing decision for the client.

Core Integration and Granular Analysis

Strunk also offers integration with any core system. The solution is designed to pull loan and relationship data directly from the core into the software.

  • Robust profitability and origination reports are then built using this data.
  • These records can be used to model the full relationship when a new pricing decision is being considered.
  • The data is also used to develop a detailed loan profitability analysis that shows at a very granular level where the bank is making money within its lending portfolio and what components of the portfolio are not as profitable.

This granular insight is excellent information for bank management to help drive strategy, while it is also helpful for the entire lending team to see more specifically why the bank needs to take a different approach to pricing.

For more information, please email info@strunkaccess.com or visit us at https://strunkaccess.com/pricing-manager/ to schedule a brief demo.

Enhanced Risk Indicators for Elder Abuse & Financial Crime

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Strunk’s Risk Assessor frameworks have recently undergone an important upgrade, now incorporating both elder abuse and FinCEN-related risk indicators to further strengthen compliance and customer protection efforts. This update reflects the financial industry’s growing commitment to addressing vulnerabilities that may impact senior customers, as well as the need to keep pace with evolving regulatory requirements.

The addition of specific elder abuse indicators is particularly important, as it encourages financial institutions to closely monitor for irregular behaviors or interactions involving senior clients, track changes in transaction patterns, identify unusual account activity, and evaluate the institution’s overall customer base.

Alongside these elder abuse indicators, Risk Assessor now features new FinCEN-related risk indicators that emphasize various types of financial crime, such as check fraud, wire fraud, ACH and digital payment fraud, identity fraud, and loan and credit fraud. These enhancements are designed to help institutions better identify, assess, and mitigate risks and respond to emerging threats in the financial landscape.

Strunk’s goal is to provide financial institutions with robust tools that empower them to be more proactive and thorough in their risk management practices. The comprehensive set of new risk indicators is aligned with BSA/AML/OFAC and FinCEN guidance, offering deeper insights into both inherent risks and the effectiveness of existing controls. By leveraging these indicators, institutions can ensure stronger protection for vulnerable customers and improve regulatory compliance.

If your institution is ready to enhance its risk management capabilities, you can learn more about activating these indicators within your existing framework by contacting Strunk at 800.728.3116 or info@strunkaccess.com.

Customizable Fields in Strunk’s ODP Manager

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Each hosted ODP Manager software setup includes a standard set of requested and optional data fields that appear in the ODP Manager standard letter templates and reports. These fields are populated in an extract file created by an institution’s core or report writer. These fields are updated daily and imported into ODP Manager.

Each ODP Manager mapping is customized to each institution’s specific extract file. This allows the flexibility to include institution-specific fields to be imported. These fields are marked as flex fields and are displayed in Account Inquiry with the appropriate institution-specific label. Once the fields have been mapped and imported into ODP Manager, they can be used when needed for letter criteria, custom queries, and report groups.

These additional data flex fields allow institutions options to customize the ODP Manager software to make their Overdraft Privilege Program management easier and more efficient.

If you have any questions about adding flexible fields to ODP Manager, please contact Strunk Support at support@strunkaccess.com for more details.

Banks…How to Stay Independent and Viable

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When I started in banking in 1984 there were 625 banks chartered in the state of Kansas and today there are less than 200. The same thing is happening in every state, but of course that is over a 40 year time period. What will happen in the next decade as very few new charters are being established and banks are consolidating almost daily across the country? Furthermore, how can your bank be competitive and stay independent?

As bank ownership becomes older and some with families who don’t have children interested in running a bank the decision to sell is inevitable. But, for those who want to keep the bank and pass it down to generations there are several things you can do.

Financial Institutions with a small asset base or in smaller rural communities need to find ways to increase income and become very efficient from an expense perspective. Of course the regulatory environment can seem overwhelming at times but it doesn’t have to be that way.

For the past 30 years, Strunk has provided income solutions and cost saving programs that help all banks regardless of size. Our signature Overdraft Privilege program has been one of the best fee income ideas in the history of banking. Many banks are revitalizing their “old worn out” ODP program that was implemented 20+ years ago. We also have other tremendous fee income ideas that cost very little to implement.

Our Risk and Vendor Manager program can help cut costs and make it easy for your bank to do regulatory required risk assessments and manage the vendor due diligence process.

Contact Strunk at 800.728.3116 or email at info@strunkaccess.com to learn how we can help you make money or become more efficient.

 

Why do Banks Outsource Vendor Management?

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Managing the vendors that a bank does business with can sometimes seem like it is a hassle and many times that task is outsourced to a third party. Why waste the money? It doesn’t have to be that way.

Regulators have moved the needle to ensure banks understand the risks of each vendor they do business with. On average a bank has 90+ vendors with generally only 4-6 of them considered “critical” or “high” risk based on risk assessments. Many times if a vendor has access to personal identifiable information the bank automatically considers it a critical risk vendor.

Having a repository for information pertaining to each vendor is of course something all banks need to have. Documents such as contracts, service level agreements, insurance certificates, business continuity plans and updated financial information are necessary as well. Having a tickler system to notify the bank that a document is about to become outdated is important too.

Doing risk assessments on an annual basis for critical and high risk vendors is a best practice and required by the regulators. A process to standardize the assessments is also a good way to manage vendors.

Strunk’s Vendor Manager solution has a repository for pertinent information; has a tickler system to notify bank personnel of needed updated documents; and it has a comprehensive risk assessment tool that allows the bank to manage the vendor management process affordably.

Contact Strunk at 800.728.3116 or email at info@strunklp.com to learn how our Vendor Management solution can help your bank.

Introducing Strunk’s New Cybersecurity Assessment Feature

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As the digital landscape evolves, so do the tools necessary for financial institutions to assess and manage cybersecurity risks. We are excited to announce the release of Strunk’s updated cyber risk assessment feature, designed to help your organization transition away from the FFIEC’s Cybersecurity Assessment Tool (CAT), which will sunset on August 31, 2025.

The FFIEC has recommended several alternative resources, including the NIST Cybersecurity Framework (CSF), Cyber Risk Institute’s (CRI) Cyber Profile, CISA’s Cybersecurity Performance Goals (CPGs), and CIS Critical Security Controls. To address the need for modern, flexible, and regulatory-aligned frameworks, Strunk now offers two new assessment templates based on our preferred tools: NIST CSF and CRI Profile.

These templates provide a structured approach to managing and reducing cybersecurity risk. The NIST CSF offers a high-level, adaptable foundation for organizations of any size, while the CRI Profile provides enhanced detail tailored to the unique needs of financial institutions. By utilizing one of these frameworks, you can effectively evaluate your risk posture and strengthen your cybersecurity efforts.

When choosing the right assessment tool, it’s important to consider your organization’s size, complexity, priorities, and goals. The FFIEC encourages institutions to use self-assessment tools that are “commensurate with their risk” to support a robust control environment. Our new feature empowers you to explore these alternative frameworks and tools, ensuring a seamless transition and continued effective cyber risk management.

For more information about how our solution can assist you in preparing for the future of cybersecurity risk management, please contact Strunk at 800.728.3116 or info@strunkaccess.com.

Periodic Review of Accounts for Overdraft Privilege

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To run a successful Overdraft Privilege program, at least 90% of eligible checking accounts should have an OD Limit. Strunk recommends that institutions periodically review accounts not currently in the ODP program to determine if the accounts now qualify for Overdraft Privilege. Performing this review at least quarterly (or more frequently if able) will help to maintain higher participation in ODP.

The Status Tracking report in ODP Manager includes all open accounts in status codes that indicate the account does not currently have an OD Limit assigned. The ODP Status Code indicates the reason that the account did not qualify for ODP. Users should review the Status Tracking Report by ODP Status Code to determine if any of the accounts now qualify for ODP, or if not, to verify or update the reason the account does not qualify. Reviewing the accounts grouped by ODP Status Code allows a more efficient process and allows users to review certain status codes more frequently if needed.

The ODP Requalification group on the report shows accounts that are no longer overdrawn and have a certain level of deposits in the last 30 days. These accounts likely will requalify for ODP unless the account has other circumstances that prevent it from being in good standing.

When an account meets the qualifying characteristics and is assigned an OD Limit, ODP Manager will show the accounts as due for a Welcome letter or Reinstatement letter.

If you have any questions about ODP Manager’s Status Tracking report, please contact Strunk Support at support@strunkaccess.com for more details.

Risk Assessments Made Easy for Banks

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The risk assessment process for community banks can time consuming and daunting but it doesn’t have to be that way. When Strunk demoed their Risk Assessment tool to regulators in Washington DC they said “community financial institutions struggle doing risk assessments and your program will help them with the necessary process”.

Whether your senior lender is looking at loan concentrations; your IT person doing the risk assessment for cyber security; or your operations team is working the on ACH or BSA risk assessment, generally those doing the assessment hate the process whether it is annually or more frequently.

Key Risk Indicators handed down by the regulators govern the risk assessment process and you must quantify risks and then determine the quality of risk management to determine the “residual risk”. The Strunk solution can help you do this and it is easy to use, automated and affordable. We provide over 950 key risk indicators so you don’t have to come up with your own.

Managing the board approval process for policies can also be a hassle. Our tool tracks changes and allows your associates to either read, make changes, or approve policies based on their log in credentials. When the regulators ask what changes have been made to policies since the last exam all you have to do is click on a button.

Tracking issues that arise from an outside audit or exam may be a manual process as well. Our solution helps coordinate those issues until they are resolved.

Lastly, vendor management is a hassle or in some cases outsourced to a third party vendor. It doesn’t have to be that way.

Contact Strunk at 800.728.3116 or email at info@strunkaccess.com to learn how our Enterprise Risk Management solution can help your bank.

Managing Fresh Start Repayment Plans in ODP Manager

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Fresh Start Repayment Plans may be available to customers to allow them to repay an overdrawn balance in up to 4 payments while still retaining the use of their checking account. Fresh Starts may also assist financial institutions in collecting on overdrawn accounts which may have been charged off otherwise. When requested, accounts are reviewed to determine if the account meets criteria to qualify for the Fresh Start.

Once an account has qualified, users can choose to enter and track Fresh Start Repayment Plan information in ODP Manager. Entering the repayment schedule start date, balance, and number of payments will allow the correct payment amounts and dates to be determined. The Fresh Start agreement can be populated directly from the repayment schedule. The individual account’s Fresh Start information can also be exported as a PDF. Individual payment reminders are created and will show when due/overdue in ODP Manager. This reminds users to check the core system to verify if the payment was made as agreed. If so, users can enter payment dates and amounts in ODP Manager.

If a customer’s Fresh Start payment is not paid as agreed (ten or more days past due), the Fresh Start is in default, and the checking account should be closed and charged off. The Fresh Start Default letter in ODP Manager can be generated by entering the customer’s account number to prefill the name and address. This letter notifies the customer that the account has been closed, charged off, and reported to the appropriate agencies.

ODP Manager also includes a Fresh Start Tracking report which will list all accounts currently assigned a Fresh Start ODP Status Code. The Fresh Start ODP Status Code should be assigned to accounts when the ODP Limit is removed when the Fresh Start Repayment Plan is initiated. In addition, ODP Manager can display a list of all currently entered Repayment Plans that can assist users in tracking loan amounts, payments made, and outstanding balances. This summary reporting can be exported to PDF or Excel.

If you have any questions about ODP Manager’s Fresh Start Repayment Plan features, please contact Strunk Support at support@strunkaccess.com for more details.

An independent certified public accountant has examined Strunk’s operations and found them to be in compliance with the AICPA’s Trust Service Principles. It was determined that Strunk meets the Security, Availability, Processing Integrity, Confidentiality, and Privacy criteria for SOC 2 established by the AICPA.