This is a tricky problem – and one I think a lot of community banks face. I don’t have “the answer†(not sure there is one), but I do have some thoughts/comments…
I think most service providers (at least those that service financial institutions) understand the need for vendor due diligence and want (or at least are willing) to help. Some of the issues I have seen causing delays include:
- Finding the right person to ask. Sometimes, particularly with larger providers, we are asking the wrong person for the information. It may help to ask each vendor who the person/department is who helps bank’s with their vendor due diligence – if they service a lot of financial institutions, they likely have someone designated to this role. Also, I find many companies “publish†a due diligence packet for their customers – if you can find this packet, you can document the location and return there periodically to obtain updated information (bypassing the need to ask).
- Asking for too much. Sometimes I have seen a bank compile a list of every possible document and send it to all vendors rather than only asking for the specific items needed to evaluate the vendor. This can cause delays in getting the items you really need.
- Getting lost in the shuffle. I think all bankers understand being overwhelmed by requests – bankers wear a number of hats – it is similar with many service providers. So, one letter may not be enough – we might have to send a couple of letters and emails and even call – this is more burden on the bank, but may be required to make sure we get what we need.
Reminder: key critical vendors that service a lot of institutions may be examined. If so, you can ask your examiner for a copy of their last exam – this is good material to review as part of your due diligence process.
Hope this helps some – good luck!
Thanks,
Russ