Is your FinTech Vendor Over Promising and Under Delivering?
Lately, we have encountered an alarming number of situations where vendors have failed to timely deliver essential products, promised certain functionality at signing that was actually not developed and related situations, causing substantial headaches for the affected credit unions. Unfortunately, in many of these situations the contract was signed as-is and contained very few protective provisions. Similar situations have led to the courthouse in recent years including Wildfire Credit Union v. Fiserv and ORCC (ACI) v. Desert Schools FCU.
The best way to avoid arguments with the vendor and possible litigation is to have a clear, detailed contract. It”s a little more work on the front end, but avoids wasted time and costs down the road.
A few pointers:
• Don’t sign an agreement without addressing key functionality, interfaces, SLAs, and consequences for vendor failures;
• Don’t sign a contract unless you have high level milestones in the agreement (if a “project plan” to be “prepared immediately” after the contract is often problematic);
• Don’t let the vendor tell you pricing “expires,” or your pricing is so good, they can’t change other contract verbiage;
• Pay careful attention to the “legalese” and particularly the limitation of liability provision;
• Consider video/recording the vendor’s sales demonstrations; and
• Customize your RFP to ensure your Credit Union’s specific concerns are addressed.