Vendor Due Diligence Material Tracked in Strunk’s Vendor Manager Software

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Financial institutions regulated by the OCC, FDIC, and Federal Reserve must conduct due diligence on third-party relationships per the Interagency Guidance on Third-Party Relationships: Risk Management. Regulators expect financial institutions to review vendor documents thoroughly rather than just glance over them. Organizing all your vendor management in a secure, web-hosted database is the first place to start in this process. Strunk’s Vendor Manager software simplifies the overwhelming task of monitoring existing vendors and onboarding new ones.

A centralized repository for your due diligence documents ensures that your financial institution has a vendor management program that allows you to engage your vendors at each phase of the vendor lifecycle. This will ensure that all departments and business lines can easily access a unified document from your financial institution while dating it to make sure that it’s the most recent document. This process assists your financial institution in evaluating vendors to ensure they align with operational, financial, and regulatory standards.

Strunk’s Vendor Manager software automates due diligence process by sending alerts to financial institution stakeholders and vendors, saving time and effort. Vendor Manager automates vendor due diligence, providing a practical framework for deciding which vendors to assess in-depth, assessing the risk they present, and monitoring their performance. The Vendor Manager provides proactive risk management and reduces administrative burden. Strunk’s Vendor Manager software can help with your financial institution vendor due diligence to ensure that your organization has a process when entering into a third-party relationship. Click here to learn more.

 

Time to Consider a Loan and Deposit Pricing Tool?

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Many community bankers “look down the street” when pricing commercial loans to see what the competition is doing. Ironically, those bankers are looking at your bank as well to see what rate to offer! What if neither bank knows how to ensure the loan nor the borrower’s relationship is profitable?

In the mid 2000’s large and regional banks used pricing tools to help them win more deals and to ensure the loan/relationship met their profitability target. Community bankers were left out due to the complexity and cost of the pricing solutions.

Then from late 2008 until March 2022 the prime rate was so low that any loan a bank would make was better than investing in Fed Funds. Therefore, loan pricing tools weren’t much of a benefit to community banks. However, in the past two years rates have risen due to inflationary concerns and we are now faced with a prime rate of 8.5%.

There are many factors that go into a pricing decision and an inexpensive, simple to use loan pricing tool will give your bank an advantage in today’s interest rate environment. Size, term, fees, fixed or floating rate, balloon, collateral, and of course the borrower’s creditworthiness are all important factors.

2024 is the year to look at giving your loan officers a simple program to use to win more deals while meeting your profitability goals. Just like loans, size matters when it comes to deposits as well. Strunk’s loan and deposit pricing tool can make your bank a lot of money. Contact Strunk at 800.728.3116 or info@strunkaccess.com to see how it works.

Importance of an Effective Contract Review

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The Interagency Guidance of Third Party Risk Management states that an effective third-party risk management life cycle consists of planning, due diligence and third-party selection, contract negotiation, ongoing monitoring, and termination phase.

One of the most critical aspects of the third-party life cycle is the contract negotiation phase. It is essential to evaluate a vendor’s contract with other parties, including sub-contractors, which might transfer or bring additional risk to the financial institution. A vendor contract, sometimes referred to as a vendor agreement, is a legal document that outlines the terms of an exchange of goods or services for payment between the two parties.  Through this agreement both parties understand their responsibilities and obligations during the transaction.

The primary object of a vendor contract is to ensure that all parties involved are aware of what is expected in terms of deliverables, payment, and other relevant details. In the event of non-compliance, the vendor contract also specifies the consequences. Negotiating vendor contracts at the outset of any vendor partnership assists financial institutions in better managing their risks. Vendor contracts usually contain legal provisions, often in a specific order.

Strunk’s Vendor Manager Software allows you to score individual contracts based on the presence and quality of key provisions. Strunk’s vendor contract review enables financial institutions to identify gaps in their contracts and manage the vendor’s risk appropriately.

Flexible Fields in ODP Manager

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ODP Manager has a standard list of requested fields that are used in the recommended ODP Manager letter templates and reports. These fields are included in the extract file created by an institution’s core or report writer and are updated when the file is imported daily into ODP Manager.

ODP Manager mappings are customizable and can also allow additional institution-specific data fields to be imported. These fields will be marked as flexible fields and will be labeled with an institution-specific label in ODP Manager. Once the fields have been mapped and imported into the hosted ODP Manager software, letter criteria can be adjusted to use the additional data field values. Report groups can also be updated to use the newly available data fields as well.

This flexibility allows institutions additional opportunities to customize ODP Manager to make ODP Program management in the hosted software more efficient or informative. If you have any questions about adding Flexible Fields in hosted ODP Manager, please contact Strunk Support at support@strunkaccess.com to find out more.

Automatically Archive ODP Manager Reports

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The ODP Manager hosted software includes a suite of standard reports that are updated after each daily import. These reports can be viewed in the browser or exported to PDF or Excel. Reports for the most recent seven As of Dates are accessible.

If an institution would like the option to review, analyze, or retain past reports, users are able to export and save the reports as needed. However, if reports are not exported and saved within the most recent seven As of Dates, then the report data is no longer available. ODP Manager offers an alternative to manually saving and retaining reports. Upon request, Strunk can set up a Report Archive which automatically archives the requested reports after each daily import. This will alleviate the need to remember to manually save report copies.

The archived reports are saved as PDF files within the software. For each import As of Date, a folder containing the archived reports is created and can be downloaded. If an institution would rather download the archived reports to save to a network drive instead of accessing though the ODP Manager software, a Download Reports Archive link can be set up instead.

If you have any questions about the Report Archive option in hosted ODP Manager, please contact Strunk Support at support@strunkaccess.com to find out more.

How can Strunk’s software help with your vendor management program?

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Regulators take compliance with vendor management regulations seriously due to the critical role third-party vendors play in delivering products and services. Using third-party services can increase the risk of a banking organization, but this does not mean that the organization can neglect its responsibility to perform all activities in a safe and sound manner. It is the responsibility of the organization to ensure compliance with all applicable laws and regulations, including those related to consumer protection and security of customer information. What exactly are the Regulators looking for in a Vendor Management program? Regulators will look for your program to have structure, be consistent, and have accountability. Strunk’s software can be your perfect solution to achieve your objectives. Let’s take a closer look at how it can help you.

The first thing that needs to be accomplished is to have the right structure for your program. The financial institution needs to have a well-documented policy describing how your board and senior management intend to execute vendor management. Strunk’s Policy Manager Software can provide your financial institution with a structured, centralized single source of truth for your organization’s policies. You can also use Policy Manager to document all of your procedures, including links to policies, ownership responsibilities, automated change logging, and multiple file attachments. If your financial institution does not currently have a vendor management documented policy, Strunk can start you off with our recommended standard policy.

Next, the financial institution must establish a consistent framework for implementing the policy that was established. Strunk’s Vendor Manager software can streamline and standardize the entire process. The Vendor Manager software is designed to transform a complicated process into a more organized and self-documenting workflow. It helps to streamline and automate the process, making it more efficient and easier to manage.

The financial institution must be accountable for its vendor management program. Strunk’s Risk Assessor software can assist in identifying what risk your organization must consider with your Vendor Management program, while also mapping what controls and procedures are in place for that risk.

Preparing for your next Vendor Management exam is crucial for your financial institution. Strunk offers several tools that can help you in this regard. While regulators do not expect perfection, they do expect progress and performance. By utilizing Strunk’s software and expertise, you can ensure that you are up-to-date and organized for your upcoming exam. This will make exam time much easier.

Save with Strunk’s Effective Risk Management Tools

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Strunk is best known for our fee income improvement programs, including Overdraft Privilege, Rewards Checking and Value Checking. Strunk is also well known for assisting community financial institutions with their risk management and compliance processes using our software.

Strunk offers five comprehensive, easy-to-use, and affordable compliance management tools:

Risk Assessor helps prepare comprehensive risk assessments consistent with regulatory or other requirements, in days, not weeks.

Policy Manager organizes all policy documents into a single database, mapped to the relevant standards and control procedures.

Controls Manager schedules tests of policy compliance and tracks test results.

Vendor Manager is a specialized tool for managing vendor risk that standardizes risk assessment methodology and organizes all vendor related documentation.

Issues Manager is a centralized database for tracking all compliance issues and incidents across your entire organization.

According to Dan Roderick, CEO, “Strunk’s Risk Manager solution brings efficiency to the process and allows our clients to focus on their highest areas of risk. The solution is comprehensive but simple to use, which is something I wish I’d had access to in my days as a banker.”

All our tools are securely and reliably hosted with Amazon AWS, making them available on a variety of devices from anywhere. Risk Manager facilitates remote work and will greatly enhance your internal control and risk management processes and save time – all for one low annual fee.

If you are paying another vendor an annual fee for any one of these tools today, invest just 30 minutes to review our solution suite. We can add valuable services – and may be able to SAVE you money as well! Check out our tools today: https://strunkaccess.com/compliance-software/

Consumers Continue Wanting Access to ODP

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Consumers desire Overdraft Privilege as a financial product due to the wide array of choices available to them. In a Morning Consult survey, it was found that 9 out of 10 consumers consider their bank’s overdraft privilege valuable. So, what makes this product so valuable to consumers?

  1. Consumer’s payment will clear instead of being returned, which can be less expensive. Sometimes consumers make mistakes when paying bills and accidentally overdraw their account. Because the consumer has overdraft privilege, the bills are paid instead of returned and it prevents late fees, NSF fees, and re-presentment fees. Overdraft privilege provides relief to consumers by ensuring their bills are paid, even if they miscalculated their bank account balance or forgot about a pending payment that hasn’t cleared yet. This feature significantly reduces their worries and potential financial stress.
  2. Consumers will have funds available if they need them. Although it is generally not advisable, there may be situations where overdrawing your bank account is necessary. For example, let’s say it’s the weekend and the banks are closed, and you have an emergency that requires a visit to the hospital. However, the emergency room won’t provide treatment until you pay a $100 co-payment. Unfortunately, you only have $10 in your checking account. Fortunately, you have overdraft privilege, which means you can make the payment even if it incurs a fee.
  3. Not being embarrassed because of returned payments. When you use overdraft privilege, the recipient of your payment won’t know that your bank account has insufficient funds. Instead, they will see that your payment has been credited as expected.

Despite Congress trying to modify overdraft services, we recognize the importance and necessity for consumers to have access to such programs. Overdraft services provide a significant source of liquidity for many Americans. By having access to overdraft privileges, consumers can be assured that they can make timely payments for their rent or utility bills, thus preventing any late fees, utility shut-offs, or even eviction

Hosted ODP Manager and Institution IP Address Validation

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Strunk recommends as a best practice that institutions provide a list of IP addresses or ranges that are permitted to access the Strunk software. This ensures that users not only have a valid username and password, but also are logging into the software from an allowed IP address. Strunk can configure this feature once an institution’s allowed public IP addresses are provided.

When this option is configured, a user’s IP address is checked at login against the list of allowed IP addresses. If the IP address is not on the list, an error is displayed that shows the current IP address of the user. If the user later logs in from an allowed IP or if the IP address is added to the Allowed IP address list, the user will be able to log in successfully.

As an alternative to providing a list of allowed IP addresses, the hosted ODP Manager software can require a user to provide a PIN. If the IP address is new for the user or if the IP address has not been verified by the user in the last thirty days, a PIN number will be required. The user will request a PIN be sent to the email on record. Once the PIN is entered, the user will be able to login. Strunk can configure this feature upon request.

If you have any questions about these options in hosted ODP Manager, please contact Strunk Support at support@strunkaccess.com to find out more.

Strunk’s Loan Pricing Solution Will Increase Income

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Over the past 30 years Strunk has helped over 1,800 community financial institutions increase income with a variety of innovative products and services. Their most recent solution is a loan and relationship pricing tool that will increase your bank’s net interest margin.

Starting in 1993, Strunk was the pioneer in overdraft privilege programs which turned out to be the best fee income idea in the history of our industry. Bankers would say “How can we increase fee income with a formal overdraft program without raising prices?” Our strategy substantially increased fee income while consumers benefited at the same time by not paying the retailer’s fee for returned checks.

Then in 2007, Strunk became an original investor in BancVue which later changed their name to Kasasa. Bankers would say “How can we afford to offer 6.5% on a checking account without cannibalizing all of our accounts and increase our debit card transactions at the same time?” Guess what, the reward checking program (Kasasa) doubled debit card transactions, increased the number of accounts using online statements, and new deposits far outweighed cannibalized accounts.

Prior to Dan Roderick’s, Strunk’s CEO, group purchasing Strunk in 2013 he ran the largest loan pricing solution in the market. It was very expensive yet very popular. Working with over 400 banks across the country, he helped them their net interest margin with very little effort.

Strunk’s loan pricing solution is very inexpensive, easy to use, and will increase your bank’s bottom line, just like what we have been doing for our industry since 1993.

Contact Strunk 800.728.3116 or at info@strunkaccess.com to learn more about our loan and relationship pricing solution.

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.