Lack of In-House Expertise Prompts Financial Services Firms to Focus on Outsourcing
Nearly half (49%) of senior decision-makers in financial services organisations across the US and Europe listed ‘we prefer to use qualified experts’ among their top reasons for using a third-party technology solution, making it the top driver overall. That’s according to a new in-depth study, commissioned by Asset Control and executed by independent research firm OnePoll.
Also playing to the focus on expertise, 48% of the sample overall referenced ‘a third party has productised industry knowledge that we can benefit from’, among their main drivers for adopting standard products and services instead of internally solving business data challenges. In line with this focus, by far the biggest consideration respondents had when costing an external technology solution was ‘the availability of skills in the market for the approach chosen,’ cited by 49% of respondents in total.
Cost was also a big issue driving the uptake of third-party technology solutions. 48% of the survey sample ranked the fact that an outsourced solution ‘was more cost-effective’ among their top reasons for using it.
Martijn Groot, VP Marketing and Strategy, Asset Control said: “Financial services businesses are often attracted into adopting an outsourced approach by a straightforward drive to cut costs, coupled with a desire to tap into broader industry knowledge and expertise.
“Adopting third-party solutions typically allows firms to reduce costs through improved time to market and post-project continuity,” he added. “And the opportunity to take advantage of the breadth of expertise and understanding that a third-party provider can deliver gives them peace of mind and allows the internal IT team to focus more on business enablement which typically involves optimal deployment, integration and change management.”
The benefits of an external third-party provider approach were further highlighted when respondents were asked where they looked first for data management solutions. The most popular answer was ‘externally bundled with complete services offering (e.g. hosting, IT ops, business ops) as part of business processes outsourcing deal’ (28%), followed by ‘externally bundled with tech services offering (e.g. hosting, IT operations) as part of IT outsourcing deal’ (21%). ‘In-house with internal IT’ trailed well behind, with only 17% of the survey sample referencing it.
According to Groot: “The answers show that rather than just following the data and having to install and maintain it, businesses are increasingly looking for a much broader managed data services offering, which allows them to access the skills and expertise of a specialist provider.
“Firms today also increasingly want to tap into the benefits of a full services model,” he continued. “They are looking to join forces with a hosting, applications management or IT operations approach and often that is in a bid to achieve faster cycle time, reduced and more predictable cost of change and a demonstrably faster ROI into the bargain.”
(Source: Asset Control)