When it comes to core IT contract negotiations, community banks face a critical challenge: how to secure favorable terms while maintaining vital vendor relationships. With technology contracts representing one of a bank's largest non-interest expenses, the stakes couldn't be higher.
To demystify the art of successful negotiations, we've gathered insights from our panel of veteran negotiators.
When Paladin is involved vendors KNOW that Paladin KNOWS what THEY KNOW. They don’t play games any longer. A successful negotiation needs what I call PACE - Proactive Approach Controlled Execution.
Understand that YOU are the economic buyer. YOU can control time. YOU are more prepared because you have a company like Paladin in your corner with a tremendous amount of data.”
– Aaron Silva
Paladin’s founder & President, Aaron Silva, started doing research into the community banking’s technology providers back in 2007 when we realized the anti-competitive tactics being used against banking leaders. He has now helped hundreds of banks save nearly $1billion dollars.
Don't be mean, just firm. You can deliver uncomfortable messages in a nice way while maintaining rapport with vendors. It's about making the right concessions while staying focused on your bank's strategic goals."– Kim Strachota
Before leading Paladin over the last 16 years, Kim Strachota was a banker for 30 years including a decade as an executive. After helping Paladin write the playbook on successful negotiations Kim now helps advise the negotiating team and review final contracts.
One common pitfall? Getting too emotionally invested. Tara Holmes, who specializes in complex negotiations, notes:
Escalating beyond the Account Executive often helps fast-track the process, but it requires the right touch. Having an objective third party who understands the nuances can transform the dynamic."– Tara Holmes
Our track record backs this up - across 250+ engagements, we've achieved 100% of targeted savings, translating to nearly $1 billion in extended contract value over ten years.
Why do banks often leave money on the table in DIY negotiations? Our experts identify several key reasons:
The landscape is never static. Between API calls, compliance requirements, EFT changes, and constant vendor evolution, you need deep industry knowledge to negotiate effectively."– Bob Moreau
Preparation involves more than just gathering data. With insights from over 600 bank assessments and 18 years of contract analysis, our experts stress the importance of understanding both current and future needs:
"Know what you know, go in loaded," emphasizes Bob Moreau, explaining why thorough preparation makes the difference between good and great outcomes. "It's about understanding what you can do for the bank and being honest from the get-go."
Bob is the technical resources on the team. He previously was the CTO of a $1B bank, and has been a lead negotiator with Paladin for 12 years.
Bankers need to stay focused on running their bank. It’s not fair to ask a busy banker to manage these CORE IT renewals and negotiations every 5-7 years. Every year the technology and the contracts are evolving, and it requires a dedicated person within the bank to keep up. You need a team that focuses on these deals every day.
For our competitors, it’s not fair to throw a banks contract over the fence to a negotiator to work on in isolation. Paladin puts at least 4 people on every project (2x negotiators, a sales executive, and the CEO), but it’s the only way to deliver the level of quality that we guarantee.
At my previous employer, we were a quantity-driven shop, where quality appeared to be jeopardized at times due to extensive workloads. I’ve been shocked by how deep Paladin goes into the commercial and legal terms and the level of care that they put into each and every contract. This client's first approach is how these contracts are supposed to be handled and negotiated."– Justin, the newest addition to the Paladin Posse
Justin recently joined Paladin after being the one of the top negotiators at Paladin’s biggest competitor, where he served as an instrumental member of the highly specialized Merger Contract Negotiation Team.
At Paladin, the quality and care of our work, along with the team-based approach has made the transition a delightful experience.
Through our analysis of over 500 line items per average contract and 100+ SLAs, we've learned that successful negotiations require:
"You just need to be honest because bankers have a high level of integrity."– Rick Stanley
As Rick notes from his unique perspective having worked both sides of the table over 40 years: "We don't come in with a competitor in hand. It's about strengthening relationships and making things better from delivery to end-customer, not being antagonistic."
In today's rapidly evolving banking technology landscape, having experienced negotiators who understand both banking and technology can make all the difference. With the right approach, banks can achieve substantial savings while building stronger vendor partnerships that support their long-term success.
Want to know what what Paladin's Hired Guns did for our annual business meeting? Click here.
Want to learn more about optimizing your next core IT contract negotiation? Contact our team of banking technology experts for a confidential consultation.