It is not unusual that you as a compliance professional, can be expected to review the SaaS agreement as a subject matter expert. Moreover, I believe you SHOULD be reviewing them for your own good.
Here we will cover several major points that should be addressed during the SaaS agreement review.
Frankly, these agreements can also be a bit tricky to understand. So, let’s break down how to review them.
Understanding What’s Inside: These SaaS agreements usually contain a lot of information, but there are a few key things you should always look out for:
- Service Description: What exactly is the service being provided? Make sure you’re clear on what the software should do. Be careful as sometimes you can be offered a “package” of costly, but unpractical services.
- Pricing and Payment Terms: How much does the service cost, and when do you need to pay? Don’t forget to check if there are any extra fees! Be sure to negotiate the price reduction while scaling your customer base etc.
- Data Protection and Privacy: How will your data (or your customers’ data) be handled and protected? This is super crucial in fintech. Look for exact personal data categories, list of subcontractors used by your SaaS partner, types of data processing activities, and information security measures.
- Service Level Agreement (SLA): This part is about what happens if things go wrong. How much ‘uptime’ (time the service is available) is guaranteed, and what are the remedies if the service is down? Ensure that there is a minimum waiting time for the critical issues to be resolved.
- Termination and Renewal: How can you or the provider end the agreement, and what happens when it ends? Ensure that the notification period before termination is appropriate. Many SaaS providers tend to include 3-6(!) months termination periods so you are charged if you want to terminated immediately.
Get Expert Help: For most of us, legal documents aren’t our favorite thing to read. They can be confusing, and sometimes, it might feel like they’re written in another language. So, it’s a good idea to work with someone who speaks that language – a lawyer. A lawyer who knows fintech and SaaS agreements can guide you through the process and help you understand the fine print.
Negotiate if Needed: Remember, a SaaS agreement isn’t always a take-it-or-leave-it deal. If there are parts of the agreement you’re not comfortable with, you can negotiate. It’s important to ensure that the agreement suits your business needs.
Stay Updated: Lastly, the world of fintech is always changing, and that means SaaS agreements can change too. Keep an eye on updates to your agreement and be ready to review it every now and then.
SaaS agreements might seem intimidating, but they don’t have to be. With a little bit of knowledge and the right support, you can navigate them confidently and make sure you’re getting a fair deal. Happy reviewing!
If the outlined issues are resonating with you or you are considering engaging an external help, drop us a message using the contact form below or write to advisory@complianceaspect.com and we will be able to arrange a discussion with our experts.
