A new organisation is inviting US community banks and credit unions to band together in a bid to level the playing field when it comes to negotiating deals with their core and IT vendors.
The Golden Contract Coalition (GCC) argues that smaller financial institutions have struggled for decades under the "oppressive weight of the core vendor goliaths" such as Fiserv, FIS and Jack Henry & Associates.
By pooling their bargaining power, the coalition says its members will be able to challenge the vendors and take on underperforming IT functionality, unenforceable service-level agreements, unfavorable contract terms and overpriced, one-sided deals.
Aaron Silva, GCC founder, says: "The vendors and the banks need each other, but there has to be a fair balance established. We are trying to achieve this through the creation of the Golden Contract."
The so-called 'golden contract' promises to strip excessive legalese and self-serving conditions from core and IT agreements and pricing, and dictates the master commercial terms and legal conditions by which providers must abide.
Silva is the CEO of Paladin fs, a consultancy that offers banks "hired guns" that work to get better IT deals. Law firm Pillsbury Winthrop Shaw Pittman LLP is also backing the new effort.