Most mortgage lenders and banks do not maintain a comprehensive vendor management strategy, exposing institutions to increased compliance risk, according to a survey by vendor oversight platform Vendorly.
Almost 60% of industry executives do not have a fully comprehensive vendor management program in place, which is especially important after the Consumer Financial Protection Bureau set guidelines back in 2012 that financial institutions be held accountable for the actions of the third parties they work with.
Three in five mortgage and banking professionals claimed their organization does not have a fully comprehensive vendor management program in place, with 33% of those stating their firm's vendor management program needs improvement.
Staffing conditions arose among the biggest issues plaguing companies' vendor management initiatives, with 36% identifying employee capacity to handle workload or vendor management as the biggest hurdle.
About 40% of respondents claimed their organization has three or more full-time employees working in vendor management, with nearly the same amount, or 39%, stating they have less than three. Still, 44% said their institution manages at least 100 vendors.
The second greatest vendor management challenge cited by mortgage and banking professionals was identifying and tracking vendors.
About 47% of those surveyed do not utilize a technology platform to assist with vendor management efforts, but 90% claim it would positively affect performance.
"The importance of technology to drive efficiency, increase due diligence and further improve an organization’s vendor oversight processes is becoming a realization for many," Jim Vaca, Vendorly senior vice president, said in a press release.
About 30% of respondents claim to monitor and assess vendor performance on an annual basis.