...the technical and complex nature of data processing and other EFT agreements requires community bankers to plan out the negotiation process, request competing bids and verify obligations and commitments of all parties involved...
Toledo, OH (PRWEB) June 10, 2013
Community bankers, already inundated by an explosion of new consumer banking technologies, are being further challenged by data processing and EFT vendor contracts that are often lengthy and complex, vague in defining service standards and obligations and punitive if contract terms are altered or cancelled.
In Negotiating Better Tech Contracts, an article authored by Michael A. Scott, managing director of Austin Associates’ Technology Solutions practice area and published by ABA Banking Journal, community bankers are advised to proceed carefully before entering into any contractual arrangement with providers of data processing, ATM, mobile, internet and other electronically delivered consumer banking services.
“Mergers and corporate restructurings among data processing companies, and rapidly evolving service expectations among community bank clients are changing the dynamic involving tech providers, banks and their customers,” Scott said. The historically cozy relationship between data processing companies and community banks, traditionally characterized by stability, long-term, automatically-renewable contracts and escalating pricing, is changing to reflect shifting corporate priorities, declining technology costs and newly emergent consumer banking preferences.
“All vendor relationships are negotiable,” says Scott. The technical and complex nature of data processing and other EFT agreements requires community bankers to plan out the negotiation process, request competing bids and verify obligations and commitments of all parties involved,” Scott added.
Austin Associates has been serving community banks for more than 40 years. Its practice areas encompass investment banking, strategic consulting, financial management, risk management and technology solutions. Information about the firm is available on its website http://www.austinassociates.com.