How does a CFI Compete with the BNPL Providers?

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The number of consumers who use a BNPL (Buy Now Pay Later) service has skyrocketed in the past 12 months. Consumers like these programs since they want simple monthly payments to give them the satisfaction of paying off a purchase rather than credit cards that can become “evergreen”. Unfortunately community financial institutions (CFIs) have missed out on this opportunity but it is not too late.

Millennials and Gen Z’s are an age group that is sought after by most financial institutions. Many of these people are scared of credit cards since they never seem to get them paid off. There are late payment penalties, high interest rates, and the minimum payment allows borrowers to pay off the balance in 15 years or more. Now there is a service you can provide.

Quilo is a turnkey service for financial institutions to provide small dollar consumer loans for purchases over $250. The high yield low touch loan program is not designed to cover everyday expenses like overdraft privilege programs do.

Your customer needs a new water heater or new tires. They have savings at your financial institution that they can use or they can use a credit card to pay for the expense. They don’t want to zap their savings for this unexpected expense and they don’t want to use their credit card with a high interest rate. Quilo provides a better alternative to either of these options.

Quilo loans are funded by your CFI and they offer a low rate, simple fixed payment, no prepayment penalty, and no late fees. Exactly what your customers want and need.

To learn more about Quilo please contact Strunk at info@strunkaccess.com or 800.728.3116 for quick demo of the Quilo Instant Installment Loan Program.

Why has your Financial Institution missed out on Small Dollar Installment Lending?

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Community banks and credit unions have been shut out of the small dollar installment lending business due to the cost of taking an application, getting a credit bureau report, underwriting the loan, getting documents signed, funding and servicing the loan. Industry experts say that the cost to underwrite consumer loans typically runs $150 or more, with annual servicing cost running as high as $180 per year…doing it the ‘old school’ way.

Strunk has partnered with Quilo to provide a digital platform to make instant consumer loans for online or point of sale purchases. Large mega banks and FinTech companies have been offering these types of loans for several years and community financial institutions have been unable to keep pace. The Buy-Now-Pay-Later “BNPL” business is booming across the nation and Millennials, Gen X, and Gen Z’s are using the service…just not with your financial institution.  UNTIL NOW!

Quilo provides an opportunity for your institution to increase loans, net interest income, and offer an exciting service that consumers love, all from an app on their Smartphone. It allows consumers to make purchases and pay for them over a 3-24 month timeframe. It takes the stress out of lending…consumers don’t have to share their soul to borrow $500 and the financial institution doesn’t have to stress over telling them we don’t make small loans.

With tremendous growth potential in this segment of installment lending it doesn’t take long to show you how this would work for your financial institution. Take back the consumer lending business from the big banks and FinTech companies.

To learn more about Quilo contact Strunk at info@strunkaccess.com or 800.728.3116 for a quick demo of the Quilo Instant Installment Loan Program.

Strunk at the ABA’s Virtual Conference for Community Bankers 2021

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For the first time, Strunk attended the ABA’s annual Conference for Community Bankers virtually. During the virtual event we hosted a virtual booth, met with many familiar and new faces via Zoom meetings and attended virtual sessions. While a bit different than being together, it remains one of the most anticipated events of the year and we made the most of the connections with bankers and enjoyed seeing everyone.

We welcomed the opportunity to discuss with attendees the latest features offered by our Governance, Risk Management and Compliance (GRC) software Risk Manager, which includes six GRC tools – Risk Assessor, Policy Manager, Controls Manager, Skills Manager, Issues Manager and Vendor Manager. Strunk’s Overdraft Program is always a hot topic of conversation and we were glad to discuss our approach with long-time clients and potential clients.

Attendees had the opportunity to hear from keynote speaker, former NBA star Earvin ‘Magic’ Johnson in his session ‘The Power of Magic’. On top of his athletic notoriety, Magic is a driven and successful entrepreneur who shared what it takes to truly make an impact.

Another interesting session was hosted by Ron Shevlin of Cornerstone Advisors on the five forces shaping the banking industry today. He detailed how challenger banks, big tech, embedded finance, artificial intelligence, and cryptocurrency are affecting our banks and provided areas of focus for community FIs.

Congratulations to the winner of Strunk’s giveaway, a $100 gift card to Amazon – Mayra Rinaldi of Columbia Bank!

We hope to see you all in person next year and to once again host the conference t-shirt station. Until then, stay well.

5 Things you should do to build an Effective Vendor Management Structure

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Managing your vendor manager program can be troubling and time consuming. With the increase numbers of vendors that companies are depending on each year, companies need to make sure they are monitoring vendors and contracts more efficiency to help prevent problems before they start.

1. Identify your vendors and understand what services that they are providing you.
Creating a list of your existing vendors and understanding the nature of their service is key in your vendor manager structure. Being able to have access to your vendors list and their information will lead to both effectiveness and efficiency inside of your organization. Effective vendor management entails a detailed grouping of vendors based on criticality and service.

2. Contract Review
Storing your vendor contract in a central location will provide insights into the current stage of the vendor, for example, vendors with contract in place, vendors that require renewals, etc.. Having a centralized view of the current status of all contracts will help achieve better decision-making capabilities and save valuable time. Understanding and scoring what provisions should be in the contract will help provide the correct terms of the contract between you and the vendor.

3. Risk Assessment
Completing a risk assessment on your vendors to better understand the risks posed by its third-party relationship is critical to each vendor relationship. Identify any risks that the vendor poses with help your company evaluate whether the vendor can eliminate those risks or determine whether your company can accept those outstanding risks for that vendor.

4. Vendor Reviews
Not all vendors may perform as per your standards. It is important to choose the right vendor from multiple vendors, who meet your organizational standards and criteria while promising excellent performance. Performing periodic vendor reviews will give you a better understanding of the vendor’s performance and make sure they are providing quality product or service to your company.

5. Document Storage
As your company grows, it becomes essential to have a vendor data storage solution in place. In the absence of a vendor management system, storing and retrieving data might prove to be really tough, considering the fact that you may be dealing with multiple vendors for multiple projects at the same time. Having a centralized repository for your vendors data will help streamline and organize your vendor manager program.

How do you Store Essential Vendor Documents

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In today’s environment it is crucial to understand how you are managing your vendor documents.  It is important to know when a vendor needs to send you data or if you are missing documents and also where the documents are located.  Having a centralized repository for your vendor documents will help you become more efficient, organized and increase organizational transparency.

Having the documents that belong to your vendors in one location opens the door for better communication and collaboration.  Linking all of your vendor documents to a central repository that features automatic notifications and reminders helps you achieve better collaborations in your organization.  An important factor in achieving a fast and efficient process is ensuring that everyone has access to the most accurate and up-to-date versions of your vendor document.  Using a software that can eliminate the need for physical filling and cluttered storage will help you become more organized and will eliminate human errors.  Storing your documents in a software will provide your organization the ability to retrieve the vendor documents as quickly as possible.

Searching for misfiled documents can be very frustrating and time consuming.  Using a software as your centralized repository for your vendor documents can reduce the time spent dealing with lost or misfiled documents, thus enhancing productivity and efficiency while allowing team members to perform tasks where their time is better spent.

When all of your vendor documents are in the same place, you have better visibility into that vendor.  Most software offers varying levels of accessibility based on role.  Different team members can have certain rights, permissions and levels of access that may be restricted to others.  Having this in your vendor document repository software allows an audit trail and the ability to track updates with little effort.

Is risk always bad?

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In our industry we are accustomed to thinking of risk as something we need to constantly assess and evaluate. At best, this exercise can be laborious and time-consuming. The number of risk factors to consider can run into the hundreds, often with different parts of the organization best qualified to assess each risk. The typical solution, emailing spreadsheets around the organization, is inherently cumbersome and error-prone.

Let’s take a step back and break down what a risk is. The definition of risk is a situation involving exposure to danger. But danger does not always look like we might expect. There is an important distinction to be made as some risks can actually pose a benefit to any company while others cause a greater reason for concern. Without risk, it can become easy to settle into consistency, security and stability.

Wouldn’t you like to know the importance of the risks you face and be able to easily identify them? Strunk’s Risk Manager can help identify risks you may be considering to help grow your business, as well as those risks that may present a greater threat to your organization. It helps to answer the questions:

  • What factors must financial institutions manage against?
  • At this point in time how much risk is each factor creating for us?
  • Do we have adequate management measures in place to manage the inherent risk?
  • And what is the trend – is our situation improving or getting worse?

Risk Manager tracks your risks in a database with fine-grained control over access. It documents your assessment of the inherent risk, the strength of your management of the risk and trend for both. If you must respond to a standards-based set of risks like banking industry requirements or SOC2, explicitly score yourself against these frameworks. The solution will map your policies against control activities to be sure you have appropriate policies in place that address each risk and will allow you to track your risk profile over time.

If you would like to bring together all areas of the risk assessment process into one easy to use format and eliminate your dependency on Excel spreadsheets, invest just 30 minutes to review our solution. Contact us at info@strunkaccess.com to learn more.

Strunk Solution Fall 2020 Features

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With Strunk’s most recent release, clients can now utilize new features in Risk Assessor, Policy Manager, Controls Manager, Vendor Manager, Skills Manager and ODP Manager. We’ve been busy!

Risk Assessor now provides the ability to pull multiple bank UBPR Data into one single risk assessment. This will simplify assessments for multi-bank holding companies.

Criteria based auto assignment for reader and editor groups is now available in Policy Manager. Users are able to assign specific documents based on physical location or job title, where assignment of a set of policies and procedures could dynamically change based on these rules. We have also adjusted the way the policy acknowledgement is assigned. Admin users have the ability to request that users read a policy at a configurable number of days in the event that a policy is updated throughout the year, rather than just every 365 days. Users will be notified of necessary policies to review via email.

Controls Manager now supports notification of the group owner rather than simply the control owner. Alerts will be triggered any time a significant change or update is made to a control.

Clients will be excited to see the improvements to Vendor Manager reporting. Users can sort by a customized list of vendor types, vendor risk level and renewal year within all summary reports. Reports will also include whether or not the vendor survey has been completed and if not, what the current status is.

Skills Manager exams have historically been comprised of multiple choice or true false questions. We now support the option to have an open ended comment for specified questions.

Lastly, ODP Manager provides the ability to mark old status codes as inactive or deleted so they no longer show on reports, such as the Status Tracking Report.

If you would like more information on any of Strunk’s new features or products, please contact us at 800.728.3116 or support@strunklp.com.

Educating Your Customers and Your Employees

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I was recently at a bank and asked the CEO when was the last time you told your customers about a consumer program that they had put in place in seventeen years ago. His answer was seventeen years ago. The same bank had a sign outside and it said “Loan Sale” and I asked him who he was selling his loans to?

During the recent pandemic many bankers are looking at ways to increase fee income even though mortgage origination and PPP loan fees have been through the roof. Telling consumers about the services offered by the bank is one way to generate fee income. Many banks “advertise” their services on a fee schedule and the benefits of the services are nowhere to be found. Ensuring that consumers know about the benefits of the services you offer are paramount to obtaining the level of non-interest income that high performing banks enjoy.

The same CEO answered my question about the last time the employees of the bank had been trained on the same consumer program…17 years ago! So, for the same reason as educating your customers on the benefits of a consumer product your employees need frequent training as well. Not all, but many, banks see a high turnover at the new accounts desk. Generally, the brief training that a new employee gets doesn’t go nearly as far as it needs to in order to increase the cross sale of fee income products and services.

Take a look at each service that you offer to consumers and ask yourself, “When was the last time we marketed the program (educating customers) and when is the last time you trained (educated) your employees on the features and benefits of the service?” Doing so will enhance your ability to generate additional fee income for your bank.

Is it time for your company’s next SOC 2 examination?

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If your company is like Strunk, then a SOC 2 exam is an annual topic of conversation and the certification from your CPA firm is something you proudly provide your clients. At Strunk we have built a full-featured solution to help not only manage the policies your organization follows but to tie those policies back to the AICPA’s criteria and to your company’s own internal control procedures.

A SOC 2 audit can be time consuming, frustrating and burdensome. Strunk’s Policy Manager and Controls Manager modules can put much needed structure around this process. We keep on top of changes to the AICPA criteria so that you don’t have to. If changes need to be made to your existing policies as a result of any of these updates, you can easily address those within our software, and all modifications and approvals will be captured in our logs. The application will remind specific users within your organization when control activities need to be tested and the solution even supports breaking up this activity throughout the year so that your team is not focused on such a large task all at once.

The implementation with Strunk is extremely straightforward. Your company will submit your current policies for upload and creation within our system. If you are missing policies in any area we will provide you with a template document for you to customize but you will not need to start from scratch! We will work with your team to map these documents to the AICPA criteria in our solution.

Most companies are using Excel to track control activities. We ask that you simply provide this list of test procedures and we will set them up within the solution as well. Our Policy Map will provide a linked relationship from criteria to policies to controls. Once all of your company specific information has been uploaded and created we will host a training webinar for your team. It’s that simple.

Let Strunk help simplify and organize this process for you so that you can focus on what you do best – serving your clients.

Ensure Contract Completeness with Strunk’s Contract Review

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Having a well written contract with your vendor is a critical aspect in your vendor manager life cycle.  The contract is important as it sets forth the terms and conditions of the relationship with the vendor.  Vendor contracts are legal agreements that clearly set forth the provisions and conditions of the work or services that the vendor provides.  Because the contract is the foundation for the relationship with the vendor, a complete contract review should be done before the agreement is signed.

Strunk has created a Contract Review feature in our Vendor Manager solution to help ensure your contract does not have any gaps and that each provision is understood with clear expectations.  Contract Review will assist in clearly identifying what each party’s role is and who is responsible for each area.  This will prevent any issue between the financial institution and the vendor.  Regulations require that contracts contain key provisions such as confidentiality, service level agreements, and mutual rights and responsibilities.  A thorough review of your vendor contract should be done both prior to signing a new contract and while reviewing existing contracts for renewals.  Strunk’s Vendor Contract Review will help clients address significant risk controls and regulatory compliance within each of their vendors activities.

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.