2nd National

Outsourcing In Financial Services

Structuring, Managing and Terminating Relationships with Third Parties in an Increasingly Regulated Environment

Thursday, March 20, 2003

About

Financial services providers are outsourcing business functions at record levels, with worldwide revenue in this sector alone totaling $41.3 billion in 2002. The benefits are clear: outsourcing can reduce transaction costs, liberate assets and improve service delivery, even as it allows financial service companies to focus on their core competencies. Yet while outsourcing can be a win-win situation for the vendor and the financial service provider, it can carry an unexpected and heavy price tag.

Absent a full understanding of the potential pitfalls in the heavily regulated financial services industry, the outsource relationship can become a minefield of regulatory sanctions and legal liability for the financial institution. Moreover, now that the FDIC, the OCC and the OTS - not to mention state regulators - have set their sights on third party providers in this arena, the need to ensure that your outsourcing arrangements are airtight is critical.

American Conference Institute's Second National event on Outsourcing in Financial Services focused on key issues and common, yet often unappreciated, considerations when structuring, maintaining or terminating an outsourcing arrangement with financial service providers. Key legal and business experts from American International Group, Bank One, Citibank, Citi Cards, Countrywide Home Loans, eConduit, GMAC Mortgage, Household International, IBM, MasterCard International, Nexstar Financial, Providian Bancorp Services and Providian Financial Corporation provided up-to-the minute practical information and insights on everything you need to have a successful outsourcing relationship, including:
  • How to effectively and completely performdue diligence of potential vendors before selection
  • Terms you must include in the document of understanding
  • Understanding the limitations of non-disclosure agreements
  • Contracting to preserve your rights in warranty, indemnification and limitations of liability provisions
  • How vendors and the institutions they service can work together to minimize data security risk
  • Protecting your trade secrets while giving the outsourcer sufficient information
  • Contractually linking compensation to the vendor's performance to ensure competitiveness
  • The legal and regulatory risks - and benefits - when outsourcing overseas
Whether you are just considering using a third party vendor, already have several relationships established, outsource your total consumer lending function or are a third party provider to financial service companies, these conference materials will give you the information you need to maximize your outsourcing relationships.

Contents & Contributors

About

Financial services providers are outsourcing business functions at record levels, with worldwide revenue in this sector alone totaling $41.3 billion in 2002. The benefits are clear: outsourcing can reduce transaction costs, liberate assets and improve service delivery, even as it allows financial service companies to focus on their core competencies. Yet while outsourcing can be a win-win situation for the vendor and the financial service provider, it can carry an unexpected and heavy price tag.

Absent a full understanding of the potential pitfalls in the heavily regulated financial services industry, the outsource relationship can become a minefield of regulatory sanctions and legal liability for the financial institution. Moreover, now that the FDIC, the OCC and the OTS - not to mention state regulators - have set their sights on third party providers in this arena, the need to ensure that your outsourcing arrangements are airtight is critical.

American Conference Institute's Second National event on Outsourcing in Financial Services focused on key issues and common, yet often unappreciated, considerations when structuring, maintaining or terminating an outsourcing arrangement with financial service providers. Key legal and business experts from American International Group, Bank One, Citibank, Citi Cards, Countrywide Home Loans, eConduit, GMAC Mortgage, Household International, IBM, MasterCard International, Nexstar Financial, Providian Bancorp Services and Providian Financial Corporation provided up-to-the minute practical information and insights on everything you need to have a successful outsourcing relationship, including:
  • How to effectively and completely performdue diligence of potential vendors before selection
  • Terms you must include in the document of understanding
  • Understanding the limitations of non-disclosure agreements
  • Contracting to preserve your rights in warranty, indemnification and limitations of liability provisions
  • How vendors and the institutions they service can work together to minimize data security risk
  • Protecting your trade secrets while giving the outsourcer sufficient information
  • Contractually linking compensation to the vendor's performance to ensure competitiveness
  • The legal and regulatory risks - and benefits - when outsourcing overseas
Whether you are just considering using a third party vendor, already have several relationships established, outsource your total consumer lending function or are a third party provider to financial service companies, these conference materials will give you the information you need to maximize your outsourcing relationships.

Contents & Contributors

THE DECISION TO OUTSOURCE
Joseph A. Pensabene, III, GMAC Mortgage

STRATEGIC ALTERNATIVES TO OUTSOURCING
John W. Stewart, Countrywide Home Loans, Inc.

MASTERING THE REQUEST FOR PROPOSAL PROCESS IN CONNECTION WITH OUTSOURCING BUSINESS FUNCTIONS BY FINANCIAL SERVICES PROVIDERS
John H. Burkley, MasterCard International

KEY FACTORS TO CONSIDER WHEN SELECTING AND EVALUATING VENDORS
Teresa A. Bryce, Nexstar Financial Corporation

EVALUATING VENDORS, PRELIMINARY TERMS, AND OTHER PRE-CONTRACT CONSIDERATIONS
Susan Lau, Providian Financial Corporation

ESSENTIAL TERMS FOR OUTSOURCING CONTRACTS
Neil S. Hirshman, Kirkland & Ellis
Jeffrey P. Naimon, Goodwin Procter LLP

CERTAIN ESSENTIAL TERMS FOR OUTSOURCING CONTRACTS FROM THE PERSPECTIVE OF CUSTOMER'S COUNSEL
Miriam Wahrman, Citibank N.A

CONSIDERATIONS WHEN OUTSOURCING OVERSEAS
A. Marina Gracias, Providian Financial

CONSIDERATIONS WHEN OUTSOURCING OVERSEAS
Joan Warrington, Morrison & Foerster

OUTSOURCING TRANSACTIONS: STRATEGIES FOR SUCCESS
John Delaney, Morrison & Foerster
Ruth Ann Keene, Morrison & Foerster

THE LATEST GUIDELINES: WHAT'S PERMISSIBLE NOW IN OUTSOURCING FOR FINANCIAL SERVICES INDUSTRY?
Submitted by Michael Bylsma, Office of Comptroller of the Currency

OUTSOURCING: WHAT DO REGULATORS EXPECT?
Chris Hunter, Federal Reserve Bank of New York

PRIVACY AND PROTECTION: MANAGING INFORMATION IN AN OUTSOURCING PARTNERSHIP
Marc Loewenthal, eConduit Corporation

INFORMATION SECURITY IN AN OUTSOURCED CONSUMER LENDING SERVICE RELATIONSHIP
Peter A. Silver, Bank One Retail Lending

MANAGING THE VENDOR RELATIONSHIP
Julie A. Rousselow, GMAC Mortgage Corporation

SALVAGING AT-RISK RELATIONSHIPS…AND WHAT TO DO WHEN YOU CAN'T
P. Michael Nugent, Heller Ehrman White & McAuliffe LLP

SALVAGING AT-RISK RELATIONSHIPS…AND WHAT TO DO IF YOU CAN'T A FOCUS ON INTELLECTUAL PROPERTY ISSUES
Kurt M. Maschoff, Buckley, Maschoff, Talwalkar & Allison LLC

SPECIAL ISSUES FOR MORTGAGE LENDERS
John Kromer, Goodwin Procter LLP

THE BOTTOM LINE: DEVELOPING AND IMPLEMENTING THE FINANCIAL DRIVERS FOR OUTSOURCING CONTRACTS FROM THE BASE CASE THROUGH THE PRICE
Akiba Stern, Shaw Pittman


DOCUMENT TYPES: PRESENTATIONS AVAILABLE: 0