Vendors and Vaults: Managing Risk Beyond Your Walls

Third-party relationships are essential, but if something goes wrong, your bank is still accountable. That’s why strong vendor oversight is not just good practice… it’s a regulatory expectation.

What’s at Stake

Your core processor, cloud provider, mobile banking vendor, even your marketing software—all of these touch sensitive data. A weakness in any link could expose your customers and damage your reputation.

Common vendor risk issues:

• Missing due diligence before onboarding
• Lack of clear service level agreements (SLAs)
• No formal exit strategy if things go south
• Insufficient ongoing monitoring

Key Risk Management Practices

1. Due Diligence – Review financial health, security practices, audits (SOC 2, etc.)
2. Contract Management – Ensure SLAs define uptime, breach response, notification timelines
3. Ongoing Oversight – Conduct annual reviews, require breach reporting, assess performance
4. Exit Planning – Have a backup vendor or off-ramp plan for each critical partner

• Do you have contracts on file?
• Are they reviewed annually?
• What’s the exit strategy if they fail?

Build a vendor risk matrix. Because the next headline breach could come from someone with your logo on their footer.