The Role of Managed IT Services in the Financial Sector

The financial sector is among the most heavily regulated in the world. It’s governed by state and federal laws designed to protect consumers’ money and privacy as well as regulations that protect investors, among others. It would be impossible to comply with this complex regulatory landscape and carry out normal business operations without technology. 

Financial organizations rely on extensive IT infrastructure for everything from processing transactions to protecting data integrity to detecting fraud. For businesses without a large IT department, managing all of these functions can be challenging. 

Many are turning to managed IT services to manage complex IT environments, reduce downtime, and stay ahead of technological advancements. By outsourcing IT management, financial firms can focus on their core business operations, knowing their IT systems are secure and up to date with industry standards.

Understanding Managed IT Services

Managed IT services act as an external IT team. They handle network management, cybersecurity, data storage, cloud services, and IT consulting. While traditional IT support is reactive in nature — responding to problems as they arise — managed IT services are proactive. They prevent issues by continuously monitoring and maintaining your systems.

Some examples of managed IT services include: 

• Network management to optimize performance and reliability
• Advanced cybersecurity protection 
• Secure, scalable data storage
• Cloud services, such as infrastructure and software-as-a-service (SaaS)

Benefits of Managed IT Services for Financial Institutions

When you outsource your IT services, you can concentrate on your primary business functions. You don’t have to spend the time and resources cultivating a specialized IT department. Some other benefits of managed IT services include the following.

Enhanced Security and Compliance

Financial organizations handle highly sensitive information, which could lead to significant monetary losses for consumers if it were to fall into the wrong hands. This increased vulnerability makes cybersecurity a top priority for businesses in the financial sector. 

Managed IT services can provide comprehensive cybersecurity defenses that line up with industry standards and best practices. They can also keep you in compliance with regulatory frameworks such as the General Data Protection Regulation (GDPR), which strictly outlines how consumer data must be handled, and the Payment Card Industry Data Security Standard (PCI DSS), which mandates how organizations must store, process, and transmit payment account data.

Cost Efficiency and Predictability

Managed IT services can significantly reduce the overhead costs associated with in-house IT teams. They typically charge fixed monthly fees so businesses can plan and budget effectively. A thorough cost-benefit analysis often shows a high return on investment due to the reduced downtime and lower costs compared to hiring, training, and retaining a full-time IT staff, particularly for small and midsize businesses. 

Improved Operational Efficiency

Because they’re specialists, managed IT providers have processes in place to streamline operations and reduce downtime. They can respond faster to issues that arise and minimize the disruptions to financial operations. You’re likely to experience faster transaction times and improved customer satisfaction as a side effect of having more reliable systems. 

Access to Expertise and Latest Technology

With managed IT services, you’ll have access to specialized IT expertise without the need for additional investments in training or hiring. These providers keep up with the latest advancements so you can benefit from cutting-edge technology. For example, they can adopt artificial intelligence for fraud detection or blockchain technology to facilitate secure transactions.

Addressing Challenges in the Financial Sector With Managed IT Services

Managed IT services can help financial organizations efficiently handle challenges in several areas, including the following. 

Data Management and Analysis

Financial institutions handle vast amounts of data. Managed IT services provide efficient data management and storage. 

Managed IT services can also provide a competitive advantage through data management. For example, companies involved in stock trading require low-latency networks for real-time data processing and transactions, which a managed IT service can provide. 

Risk Management

IT risks are a concern for all businesses, but even more so for those in the financial sector due to the heavy regulation and high cost of noncompliance. Managed IT services are experienced in identifying and mitigating IT-related risks. 

They can also help with disaster recovery and business continuity planning. Financial organizations need to maintain uninterrupted access to their data and systems in the event of a natural disaster or cyberattack. Managed IT services can facilitate this by providing cloud-based data storage solutions. 

Customer Experience

The benefits of managed IT services aren’t limited to the back end. Managed services support customer-facing technologies such as mobile banking apps, online transaction platforms, and chatbots as well, resulting in a better customer experience.

Key Considerations When Choosing a Managed IT Service Provider

When you’re trusting a third party with something as valuable as your IT infrastructure, you should carefully vet them. Consider the following factors: 

• Provider expertise and experience: Look for a partner who has extensive knowledge of the financial industry. Check their credentials and certifications, and ask for client testimonials. 
• Service-level agreement (SLA): Assess the SLA for response times, uptime guarantees, and performance metrics. Make sure the SLA aligns with your business's goals and supports your operational needs. 
• Scalability and flexibility: You want a partner who will be able to grow with your business. They should be able to scale the services they provide quickly and easily and offer customized options designed just for you. 

Key Takeaways

Managed IT services improve security and compliance for financial organizations while increasing their operational efficiency and providing access to specialized expertise. As technology continues to advance, the financial industry as a whole will likely become more dependent on a strong IT infrastructure and cloud-based data management solutions. 

Standley Systems has decades of experience helping businesses develop proactive technology strategies. Reach out today for a consultation and IT system assessment.