How do banks gain benefits by partnering with an MSP?
Why would a bank need a managed service provider (MSP) if they already have an IT team?
First, let’s quickly cover the environment that has led to the growing need for MSPs in the banking and financial services industry.
Today more than ever before, banks, credit unions, and other financial institutions depend on technology to give their customers the best possible experience. The introduction of cloud and mobile technologies has made offering these modern experiences possible. At the same time, compliance and security standards have evolved, making it difficult for any internal IT team to keep up with it all.
Read on as we take a more in-depth look at eight key benefits banks gain by partnering with an MSP.
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Quickly resolve incidents and service requests
From processing deposits and withdrawals to servicing loans, a typical multi-branch bank processes an extremely high volume of transactions a day through its core banking system. In a perfect world, all these transactions would be processed without a hitch. Problems inevitably crop up, however, and can often be more than an internal IT team can handle. These problems can turn into service interruptions, causing customer dissatisfaction, loss of revenue, and regulatory penalties if left unresolved. Luckily, that’s what incident management and service requests are for. The knowledgeable IT staff and quick services of an MSP play a key role in keeping these core banking services running smoothly.
Manage multiple vendors through a single point of contact
Core banking systems often interact with dozens of other systems to enable a bank’s day-to-day services. And to manage those systems — such as the underlying cloud infrastructure, operating systems, databases, apps, and employee computers — banks routinely use multiple vendors. Managing them all is a complicated overhead spread across multiple bank branches. To simplify things, an MSP can provide a single point of contact and coordinate with those vendors, travel to them when necessary, and fix any issue that arises as per the respective contracts.
Access to complete stack of skill sets
Banks may be saddled with limited technical skills and lack of latest software. In a fast-changing IT environment, MSPs bring several advantages to banks through their complete package of skill sets. Banks gain access to experienced and highly specialized talent, knowledge and application of emerging technologies, and visibility into future trends in the MSP’s areas of expertise across infrastructure, platform, databases, applications, security, etc.
Meet banking security and compliance requirements
Belonging to one of the most heavily regulated industries, banks must comply with a litany of compliance standards while also fending off costly data breaches. Banks invest in expensive security tools and staff to keep their customers’ data safe, but these costs can quickly add up. Dealing with security and compliance can put a strain on internal IT staff, who also have to keep up with other day-to-today duties as well as figure out ways to improve the systems.
To alleviate this burden, banks can outsource these IT needs to an MSP. As the IT security and compliance needs of the bank have to be consistently looked at and mitigated by a team of infosec experts, the service offered by an MSP should include security as part of the offering at all levels. MSPs are experts who optimize your IT infrastructure to meet these regulatory requirements and use best-in-class security tools and knowledge to protect your core banking systems from cyber security threats.
Overcome challenges of the latest technologies
Most businesses, not just banks, find it challenging to adopt the newest technologies. To compete with fintechs and to offer customers the convenience of digital experiences, banks must evolve by implementing and maintaining technologies such as cloud-native applications and the latest in cyber security — while staying on budget.
Implementing these technologies can induce a lot of challenges, however. Banks must train and hire their IT team to be knowledgeable in these technologies, which increases the overhead of training and onboarding multi-skilled resources. MSPs can leverage their expertise to overcome these challenges with their on-demand ramp-up and value-added services. With their large number of skilled technology professionals, MSPs can implement solutions that an internal IT team could not, be it because of a lack of technology-specific knowledge or not enough staff.
Overcome attrition and gain IT resources with banking domain expertise
Post-COVID, there has been a large skills gap in the market, especially when it comes to IT. A recent survey from IEEE Transmitter1 found that 74% of technology leaders found it challenging to recruit technologists and fill open tech positions. No one knows what the future holds regarding the skills gap, but businesses across industries are losing skilled and knowledgeable resources. Furthermore, it’s even more difficult for a bank to find IT professionals who also have banking domain expertise.
Banks can partner with an MSP to address the skills shortage with a single contract. It’s important to find an MSP that has the multi-skill set of IT and banking expertise needed to manage your banking systems.
Deliver truly great customer experiences through an SLA and XLA service framework
A service-level agreement (SLA) between an MSP and its customer solidifies what the MSP will provide, as well as metrics such as response time for those services, setting the expectations for both parties. For banks, MSPs offer service-driven SLAs with multiple priorities, severities, and impact levels that affect the banks as well as the banks’ customers.
Realizing the importance of the end-user experience (not just the technical aspects and numbers), some MSPs go beyond and include an XLA, or experience-level agreement, as well, to strengthen the partnership. XLAs measure the actual outcome of the services provided. In other words, say the MSP provided the agreed-upon services at the agree-upon levels. Great. Are the end-users happy?
Save and plan better with predictable and fixed, long-term costs
In-house IT expenses throughout the year can really add up. From many small, predictable expenses to surprise hardware replacements, you can quickly go over your yearly IT budget. By partnering with an MSP, your bank can receive 24/7 support for a fixed monthly fee. When your monthly IT bill is predictable, you can properly allocate your budget toward other areas of the business. Moreover, it’s estimated that managed services can help reduce IT cost by 25-45% and increase efficiency by 45-65%2.
MSPs offer more than maintenance and support services these days. MSP engagements now often include a lot of value creation services at a fixed cost as well. For this reason, businesses are now partnering with MSPs for the long term. There are even cases where the annual charges diminish due to consistent improvement in services, automation, and value creations.
Conclusion
Managed services for the banking industry can enable your bank’s IT team to do more. While your in-house team focuses on their core, revenue-generating activities, let an experienced MSP handle the repeatable maintenance and support of your banking systems.
What Relevantz Can Do for You
We help customers manage skill complexity, delivery risk, the regulatory landscape, cost efficiency, automation, and innovation through outsourcing maintenance of existing infrastructure, infra support, cloud, and agile managed services. We also support customers who need legacy application support and reduce the cost of modernization. Our hire and support model helps protect the domain knowledge of your existing workforce and helps to address the talent gap.