Managed services gains momentum in financial services industry

Posted by Manny Veiga on Feb 20, 2014 11:10:00 AM

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We wrote recently about trends that suggest small banks are adopting IT at a faster rate than their larger counterparts, and explained why increasing tech adoption in the banking sector is only a good thing for the IT channel.

Now, a new report published in Wall Street and Technology suggests that the financial industry as a whole is making a shift toward managed services out of a need for predictable IT expenses and tighter security, among other factors. financial industry security

Dollar dollar bills
Mike Powell, head of enterprise services at Thomson Reuters, cited data from a TABB Group forecast that says half of all financial institutions will be outsourcing some of their IT to managed services providers by 2016.

The reasons why shouldn't be unfamiliar to channel observers:

  • Predictable IT costs: Instead of spending all their IT money upfront in infrastructure investments, financial firms want to spread their IT costs over time in predictable month-to-month expenses.
  • Better IT responsiveness: Working with managed services providers offers these companies a chance to be a bit more agile and flexible when it comes to IT investments.
  • Improved security: The financial industry is highly regulated, and managed services providers might be able to lend a hand with compliance, the report suggests.

Not all financial companies are on board with outsourcing. Powell cited a survey of participants at a recent Reuters/TAAB webinar which found that 53 percent would "limit their transition" to managed services out of concern for security.

However, Powell adds, this concern is off the mark, and would be eliminated if financial services firms knew a bit more about the expertise MSPs could offer.

"By looking under the surface of what managed providers have in place to manage security, bank CIOs, IT directors and market data managers would reveal a reassuring and possibly surprising picture," Powell wrote of MSPs' capabilities to support financial security.

SMBs gravitate to managed services

Financial services providers are not the only ones jumping on the outsourced IT trend, as small and medium-sized businesses of all kinds have become more aggressive in their pursuits of channel support, according to a recent report in Forbes.

CenturyLink produced an infographic citing Aberdeen Group data that found 52 percent of mid-sized companies experienced lower operational costs and streamlined IT management through the use of managed services. 

All of this adds up to significant potential for MSPs who recognize the growing market opportunity available by servicing SMBs. If you have some specialty when it comes to security and compliance, sensitive verticals like the financial industry may be a fit for you.

However, it's important to have the tools to prove your worth to these clients. Financial services is one industry where fear of the cloud and managed services might still persist, and it will take some work for MSPs to overcome this obstacle.

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