Warding Off the Ghost of Vendors Past by Jeff Picozzi

Old relationships, be they romantic, platonic or transactional, can get in the way of new alliances-and in ways that you may least expect.

Since 2013, the Office of the Comptroller of the Currency (OCC) has intensified its scrutiny of banks' relationships with independent vendors, including service providers that may have been dropped for shady business practices.

Last year, the OCC issued an order alleging that a U.S. bank let an outside vendor make unauthorized charges to more than 400,000 consumer accounts for identity-theft and credit-monitoring services.

Even though the bank had ended its relationship with the vendor several years before, it didn't matter. It still had to pay $57 million in fines and restitution payments for activities dating back more than a decade ago.

The OCC's position is simple: Banks and other financial services firms are required to maintain strong oversight of all their vendor relationships because, when issues arise with the partner, the lending institution shares the liability.

Keeping Records on Track

If you're thinking of switching records management vendors, you should, of course, vet candidates for previous malfeasance. But you should also determine how they might help your company meet regulatory standards in more positive ways.

1. Make retrieval processes a priority. Financial institutions need to keep countless pages of mortgage documents on file. With that in mind, the optimal records management vendor should offer powerful and flexible archiving tools that make information access a snap.

2. Increase your media options. It's not enough for financial institutions to hold on to records. Banks must also ensure the files are protected from decay. An experienced partner can encourage you to think more expansively about storage, including your media options. Finding the right medium for the right record is a challenge. For archived records that are infrequently accessed, less expensive options, like tape, can satisfy both the compliance officer's need to discover and the finance officer's need to keep costs down.

3. Shred paper-based information securely and responsibly. Outdated documents containing sensitive financial information offer the unscrupulous an opportunity for data theft. A suitable partner will work with you to create an onsite or offsite shredding program that includes a retention policy and a regular pickup schedule. The best shredding programs also include a secure, documented recycling process.

Don't Be Haunted by Poor Decisions

If you have been burned by a previous vendor relationship, you should look for a new and trustworthy partner that can keep your records safe, sound and prepared for federal, state and industry regulations. That way, if you do receive an inquiry, you'll know it isn't related to your vendor and have the documents you need at the ready.

LINK:	http://blogs.ironmountain.com/2015/industry/financial-services/warding...
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