A new white paper from the CUNA CFO Council looks at the risks credit unions need to be aware of with third party relationships.
The paper discusses identifying key vendors and their risk levels, gathering information for due diligence reviews, conducting initial and ongoing reviews, tracking and documenting and in-house versus outsourced programs. The paper also includes considerations for those small credit unions with limited resources, along with five case studies of credit unions with successful vendor management programs.
The CFO council said while the guidelines require review of all relationships, the level of review for a particular vendor should depend on the level of risk the relationship poses to the credit union.
"Your due diligence process should thoroughly evaluate potential third parties before you enter relationships with them. It should also include revisiting the partnerships on a regular basis so you'll know if your partners can still provide the support you need," the council wrote.