The Endorsement Process

Leading the way to high performance

Throughout the last year, I have shared numerous ideas and suggestions with you in this column.  I have looked to our Endorsed Services Providers for their input on everything from developing effective leadership traits; how to establish and achieve strategic goals as well as highlighting specific products and services that will help you, our member, to grow and strengthen your customers’ experience with your bank.

Every so often, I believe it is important to pause and reflect upon the process that IBAT employs in the endorsement of various providers.  It has been several years since we highlighted information about the process with our membership and so I am hopeful you will find this review timely and beneficial.

The IBAT Endorsed Provider designation is assigned by the IBAT Board following a thorough and extensive review process.  Throughout my community banking career, I have been closely involved with IBAT and very familiar with IBAT activities.  As a banker, I knew that IBAT Services marketed IBAT’s endorsements of products and services.  As an IBAT board member, I learned that the Services board of directors had the responsibility, delegated by the IBAT board, of identifying and ultimately approving applications for IBAT’s endorsements.  As an IBAT Services board member, I learned more about The Ultimate Process for endorsements…they don’t just “happen” and they’re not for sale!

The Services board has a healthy respect for due diligence and the directors are not hesitant to ask the hard questions…questions that you would ask if the supplier were across the desk asking for your bank’s business.

The directors are elected for two three-year terms which provide the continuity of building a team that embraces the philosophy of making the right choices to benefit the IBAT membership.  They are willing to invest in resources such as the third party expertise of outside consultants, inspections of the candidates’ corporate offices to develop communication avenues with senior management and ongoing reviews of current compliance and financial status at application and renewal time.  They assign task forces of executive bank officers who are responsible for similar activities in their banks to review applications.  They bring the rigor and risk assessment that regulators expect for third party vendor due diligence to their review.

Most importantly, every evaluation questionnaire begins with the question, “What unique benefit will IBAT members receive through this endorsement that would not otherwise be available to them?”  These negotiations have saved IBAT members more than $30 million dollars since IBAT Services was formed in 1984.

The board believes strongly that the parties must be committed to the relationship.  There are stipulations that require thoughtful consideration from the providers – adherence to an annual financial commitment of marketing support and minimal guarantee of revenue from the sale of the provider’s endorsed product.

There is no shortage of candidates for IBAT’s portfolio of endorsements.  The board believes that maintaining its strategic endorsement focus on core products is most beneficial – touching the majority of IBAT members – using the purchasing power of community banks across Texas for negotiating the IBAT Member Only benefit.

The board retains IBAT’s general counsel, Karen Neeley, to review the contracts that IBAT members would be offered by the endorsed providers.  Ms. Neeley monitors the due diligence related to regulatory guidelines and advises the providers when legislation might affect their products/services.  Ronney Reynolds, CPA, serves as IBAT’s outside accountant and reviews financials for the potential endorsements.

What have I learned about the IBAT Services staff?  The team is tireless, consistent and focused – with tremendous pride in the integrity of the due diligence process.  They work with the ESPs to design unique programs to match the companies’ strategic marketing programs.

I trust the process and appreciate the volunteers who have steadfastly maintained the high standards of each endorsement process.  There is no question that I strongly encourage you to give extra points of consideration to every IBAT endorsed proposal for your bank!

Please refer to the IBAT Services ad in this issue to see the list of products and services currently endorsed by IBAT.  I encourage you to contact these Endorsed Service Providers for additional information.  You will be pleased with their responsiveness…and their focus on your specific needs!

Authored by Scott Heitkamp, IBAT Services Chairman (2011) for The Texas Independent Banker.