Financial institutions need to be proactive in the management of their vendor relationships, said Peter Largier, global head of reference data analysis and projects at Credit Suisse. “You need to professionally evaluate the service you are getting from your data vendors,” he told delegates to FIMA 2008.
Largier focused his session on how to get the most out vendor relationships via the introduction of formal procedures and discussions. “There is a need for a formal RFP and you should ask for test data to check their product and market coverage,” he continued. “A range of considerations need to be taken into account when deciding on a data vendor, including areas such as the number of individual licenses needed, whether outsourcing providers and third parties have access to the data and contract expiry arrangements – will you still have access to the data you need once it has expired?”
However, the process does not stop there, once institutions have chosen a data provider, they must then carefully monitor the data produced. “Once you have signed up, you also need to regularly check up on service levels via meetings once a month,” Largier continued. He propounded the benefits of best practices in the area of vendor communication via a single global contact and a “partnership” approach.
“There should be a consolidated list of issues that are outstanding with regards to data across the institution and these should be fed back to vendors via a formal procedure on a monthly basis,” he said. “Actions must be set to improve the quality of data and the service in minuted meetings and these documents must be distributed to senior management to keep them abreast of developments.”
Dependencies on individual vendors must be limited via standardisation of interfaces and making sure that proprietary formats are kept to a minimum, he warned. “This means that if you have to change vendors, it is a much less complex procedure.”
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