A version of this article was originally published on BankDirector.com.

Many financial institutions have a host of third-party relationships for technology and back-office needs. Developing those relationships can help banks manage the impacts of retirements and other employee departures with more consistency, especially when knowledge or skills are hard to replace.

Deeper provider relationships can reduce disruptions related to succession gaps and help institutions adapt to a rapidly changing landscape for technology skills. Bank Director's 2026 Compensation & Talent Survey sheds light on specific concerns around the leadership pipeline; when provided with a list of leadership roles and asked which pose an elevated risk due to an expected retirement or departure respondents chose the following:

• Chief executive officer: 31%
• Chief financial officer: 31%
• Chief credit officer: 29%
• Chief technology officer or equivalent: 20%

A continuous long-term provider relationship can be a major asset in the face of such potential changes. Across the organization, employee departures from technically challenging roles might represent an opportunity to engage with an outside organization to address resulting gaps. Third-party providers can augment bank teams, rather than displace full-time employees, so those employees can focus on more strategic work.

For bank boards and executive teams, plenty of succession risks go beyond individual C-suite roles; loss of institutional knowledge can affect technology efforts, strategic execution and other areas.

We believe such relationships can be especially helpful in three key areas.

Enhancing the technology function

Leaders in the technology function often juggle board leadership priorities and examiner expectations with internal demands and industry best practices. Many banks are already embracing partnerships to help meet those multifaceted needs. Even financial institutions with more mature IT departments are leveraging external partners to supplement their teams as technology roles become more complex and specialized.

A trusted provider can provide support for these key technology needs:

• Core and ancillary banking applications
• Legacy infrastructure modernization and network support
• Data management and automation initiatives
• Artificial intelligence governance and enablement

Managing the back office

When experienced employees retire or leave, banks may find that some processes largely rely on institutional knowledge and aren't always appropriately documented. An external provider can help standardize workflows, improve documentation and reduce overreliance on specific individuals or roles.

Banks will need to understand the organizational resistance that may accompany the back-office process changes that third-party providers help implement. Clear, up-front acknowledgement of potential change management issues can help institutions mitigate bottlenecks ahead of time as employees adapt to new processes.

An external provider may help to find efficiencies in:

• Operations and transaction processing
• Accounting and finance
• Loan operations and deposit operations
• Customer due diligence

Strengthening risk oversight

Financial institutions' risk management programs are becoming more complex as banks navigate evolving cybersecurity threats, third-party risk requirements and shifting regulatory expectations. Strategic providers can help to strengthen oversight and management of these risks, though the bank ultimately retains responsibility for governance, oversight and compliance.

In particular, a third-party provider can support risk-related operations for:

• Internal audit strategy, risk assessment and audit planning
• Outsourced and co-sourced internal audit programs
• Specialized project-based internal audit engagements
• Cybersecurity monitoring and incident response
• Model risk management
• Third-party risk management
• AI governance
• Regulatory compliance
• Policy development and governance

The bottom line

As talent pressures, technology demands and risk expectations evolve, banks may benefit from viewing qualified third parties as strategic extensions of their organizations, rather than transactional service providers. Banks that have traditionally kept supplier relationships at arm's length may be missing out on mutual benefits that accompany a deeper partnership.

Here are three practices to foster a closer relationship with vendors:

• Sharing strategic goals: Rather than only having conversations with a vendor when a problem arises, banks should communicate their top priorities, growth goals, digital banking aspirations, and plans or concerns.
• Inviting key providers into planning discussions: Clear visibility into plans for the year ahead can help external providers better serve banks. Financial institutions might consider giving key providers visibility into aspects of annual planning.
• Measuring outcomes instead of activities: Banks should work closely with providers to understand, from the outset of any work, that adoption or implementation alone should not be the main determinant of success. Rather, teams should gauge success with specific metrics related to customer experience, savings or efficiencies, new revenue opportunities, or risk reductions.

Looking ahead to the next decade, the banks best positioned for success will likely be those with strong ecosystems of trusted providers helping them navigate technological change, regulatory change, risk and growth.