Why the Finance Industry Increasingly Relies on IT Managed Services

Over the past decade, financial institutions have faced unprecedented economic and global changes that have skyrocketed the pressure on their risk and compliance operating models.

The financial sector also relies on some of the most complex IT infrastructure and engages in everything from cloud computing and data analytics to advanced programming interfaces.

Supporting the network and all the IT operations is increasingly challenging to manage. In the face of this difficult landscape, financial organizations have been able to rely on managed services providers to help them develop new strategies to optimize their IT operations, safeguard their business, and improve efficiency.

What IT Managed Services Has to Offer

The best IT managed service providers offer best-in-class experienced resources with true expertise in technology platforms. They allow the organization to focus on their core competencies and new ‘change the business initiatives’ while offloading the enormously time-consuming day-to-day tasks related to their IT infrastructure, including:

Major Technology Challenges for Financial Institutions

Before we zoom in on the benefits of IT managed services, let’s look at the greatest challenges faced by financial organizations that impact their ability to drive digital transformation.

It is so easy for organizations to get caught in the never-ending cycle of ‘run the business’ challenges, preventing them from investing the time, energy, and money in true ‘change the business’ initiatives. IT leaders of financial services organizations end up spending so much time trying to simply maintain their existing complex platforms that they’re often not able enact critical transformational efforts that can add real value to the business.

The biggest challenges often faced by the technical teams of Financial Services organizations include:

Architecture

• Proliferation of multiple systems complicate operations
• Redundant features across platforms create additional confusion and inefficiencies
• Fragmented data across disconnected informational sources, leading to poor data management and analysis
• High complexity to update, simplify, and integrate systems, slowing progress and impeding digital transformation

Cost

• Extremely high costs to run the business, with limited discretionary spend often consumed by existing needs
• Minimal budget leftover to change the business and evolve the solution tech stack

IT and Domain Skills

• Limited talent pool of engineers and consultants with expertise both in financial services and the necessary technologies
• High attrition rates result in costly recruitment efforts and disruption in continuity
• Heavy reliance on external contractors for essential skills and tasks

Business Enablement

• Businesses’ perspective of IT services in their organizations is one of reduced effectiveness
• Inability to sufficiently integrate digital solutions leads to low digital adoption and resulting inefficiencies
• Lack of new technologies slows business growth and cost reduction

Where IT Managed Services Fits in the Picture

To deal with the challenges mentioned above, organizations have several options. One approach is to initiate large-scale projects to rationalize their existing platforms and retire redundant legacy systems in order to streamline their architecture and reduce costs and inefficiencies. But these projects are costly and time-consuming and often require external support.

Alternatively, an organization could choose to unify all systems onto a single new platform. This comes with similar benefits, and challenges, as the rationalization approach. There is also the option to simply augment the organization’s internal teams with third party resources in order to keep all the systems running. This usually does not result in any efficiencies or cost savings for the organization, but at least keeps things operational.

The last option is to hand over the operation of the entire platform(s) to a managed services provider. The MSP will evaluate how to best optimize the environment and the execution of that plan will be their responsibility. In addition, the MSP will deliver a number of benefits:

Managed Services is a Luxury You CAN Afford

It’s not a question of convenience; it’s about the survival and success of a financial organization. In an industry where regulations constantly shift and cyber threats are always lurking nearby, the stakes are high to deliver real business value through technology. In this environment, complacency will spell disaster for any business.

Framed against this backdrop, Managed Services is an essential strategy to secure your future. It’s the driving force that separates the industry leaders from the laggards. No matter how the industry changes, one truth remains: Managed Services is hands down the best option to thrive among complexity and uncertainty.