Redefining success: Debunking the myths of Managed Services

Introduction

In the dynamic world of banking, where technological advancements are constantly reshaping the industry, the need for robust treasury function and efficient operational practices has never been more critical.

Financial institutions face a myriad of challenges, from staying compliant with evolving regulatory standards to maintaining the integrity of their operational environments. However, amidst these challenges lies an opportunity for transformation and innovation through managed services.

That said there remain a number of misconceptions around managed services.

In our recent LinkedIn Live Session, Finastra hosted thought leaders Helen Saunders, Chief Solutions Officer at Phi Partners and Nick Palmer, Vice President - Sales Director, EMEA at Options IT, who unpacked – and dispelled - some of the biggest misconceptions around managed services for medium-sized banks while exploring some of the exceptional value that managed services can deliver.

Here’s what they had to say;

What exactly do managed services entail?

According to Saunders, a great deal. Managed services encompass a range of outsourced solutions designed to streamline operations and enhance efficiency for financial institutions. ‘These services can include infrastructure support, application management, cybersecurity, and regulatory compliance, among others. By partnering with managed service providers, banks – of all sizes - can access specialized expertise and resources without the burden of hefty investments and resource constraints’.

Palmer adds that managed services also offer scalability and flexibility, allowing banks to adapt quickly to changing market dynamics. ‘By leveraging a subscription-based model, institutions can scale their resources up or down as needed, avoiding the constraints of traditional infrastructure investments. Moreover, managed service providers bring a wealth of experience and best practices to the table, ensuring that banks receive tailored solutions that meet their specific needs”.

The most prevalent misconceptions and - their corresponding realities

“One common misconception about managed services is that they are only really suitable for larger banks with extensive resources”, affirms Saunders. “However, the reality is that managed services offer scalability and accessibility, making them viable solutions for institutions of all sizes”.

Another misconception according to Saunders is around perceived cost concerns and loss of control. In reality, managed services can be more cost-effective in the long run and empower institutions to focus on strategic initiatives by outsourcing routine tasks.

A shift in control affects security management and cyber risk

While some may perceive relinquishing control as a security risk, managed service providers often specialize in cybersecurity and regulatory compliance, offering robust security measures and adherence to industry standards. Palmer agrees and adds “By outsourcing security management to experts, banks can benefit from the latest technologies and best practices, enhancing their overall security posture”.

The expectation from medium-sized banks on best practices and regulatory compliance

“Medium-sized and smaller banks, like their larger counterparts, expect managed service providers to adhere to industry best practices and regulatory standards,” says Palmer. “This includes maintaining certifications such as SOC and ISO, as well as implementing robust security measures and compliance frameworks. Furthermore, medium and smaller sized banks can rely on managed service providers to offer tailored solutions that address their unique needs and challenges, particularly in niche markets where specialization is key”.

How can smaller financial institutions make the most of their Managed Services?

They may be smaller, but the benefits are still massive. All financial institutions are turning more and more to managed service providers to access specialized expertise and resources, enabling them to compete effectively in niche markets. For example, a community bank may leverage managed services to implement advanced payment processing solutions, allowing them to offer competitive payment options to their customers. Similarly, a regional bank may partner with managed service providers to enhance their cybersecurity capabilities, enabling them to safeguard sensitive customer data and comply with regulatory requirements. Overall, managed services empower smaller banks to differentiate themselves in the market and deliver value-added services to their customers.

In summary, managed services provide a crucial solution for any financial enterprise aiming to enhance business agility, risk management, regulatory compliance, and operational efficiency. Whether you're a large institution or a small community bank, leveraging managed services can streamline operations and reduce costs while ensuring security and scalability.

Interested in exploring how managed services can benefit your institution?

Contact us now to take the first step towards long-term success.

About Finastra

Finastra is a global provider of financial software applications and marketplaces, and launched the leading open platform for innovation, FusionFabric.cloud, in 2017. It serves institutions of all sizes, providing award-winning software solutions and services across Lending, Payments, Treasury & Capital Markets and Universal Banking (Retail, Digital and Commercial Banking) for banks to support direct banking relationships and grow through indirect channels, such as embedded finance and Banking as a Service. Its pioneering approach and commitment to open finance and collaboration is why it is trusted by over 8,000 institutions, including 45 of the world’s top 50 banks. For more information, visit finastra.com

About Options IT

Options has provided global customer focused, secure, and innovative on demand IT for over 30 years. We’re on a mission to transform financial sector technology. We aren’t market participants ourselves, but the No. 1 provider of IT infrastructure to global Capital Markets firms, supporting their operations and ecosystems.

Options focuses on IT, enabling Financial Service providers to focus on business growth by deploying and managing technology strategies, custom tailoring them to your organization’s business objectives. We’re proud to provide high-performance managed trading infrastructure and cloud-enabled managed services to over 550+ firms globally, providing an agile, scalable platform in an Investment Bank grade Cybersecurity wrapper.

Our clients include leading global investment banks, hedge funds, funds of funds, proprietary trading firms, brokers, dealers, private equity houses and exchanges as well as Global Application Vendors. These clients are supported daily, across over 20 countries, in a true 24×7 ‘follow the sun’ model; we have someone on hand to assist at any hour of the day. With offices in 8 key cities; New York, Toronto, Chicago, London, Belfast, Hong Kong, Singapore, and New Zealand, we are well placed to service our customers both onsite and remotely.

Everything at Options is crafted to an industry-leading security and compliance standard. We have worked to guarantee our offering is SOC1, SOC2 & SOC3 compliant. We understand the highly complex requirements of the Capital Markets sector and work relentlessly to improve our offering, ensuring we stay ahead of the curve and bring our clients a best-in-class service.

Our service offering spans four main areas:

• Integrated Desktop
• Trading Infrastructure
• Integrated Cloud
• Managed Security

About Phi Partners

Phi is a capital markets technology consultancy, providing niche services and products to sell-side and buy-side financial institutions since 2004. We specialise in specific vendor solutions (Summit, Sophis, Murex and Front Arena) and bespoke technology areas with a particular focus on front office, pricing and risk. We offer Cloud services on AWS and Azure both standalone, and as part vendor and bespoke application management under a PaaS model. Phi thrives on complexity and we have a reputation for successful delivery. We are trusted by more than 60 financial institutions worldwide to drive their capital markets technology transformation projects and support their solutions. Our services comprise everything from short term specialist advisory services, through end-to-end project delivery, to fully outsourced application management under a Platform as a Service model. Headquartered in the UK, we have a global presence with subsidiaries in the EU, USA and Asia Pacific, and a strong presence in the major financial centres in Europe, the Americas, the middle east, and Asia. We support our global clients both on-site and from our three nearshore centres in Bucharest, Casablanca, and Sofia. Our nearshore delivery ensures a cost-effective option for our clients with absolutely no compromise on quality.