The Role of Information Technology in the Financial Services Industry

?? Strict regulations. Newly emerging and rapidly evolving technologies. Advancing competitors. Increasingly demanding customers. These challenges occupy a large part of the strategic horizon of financial organizations. Human capital and time resources are often insufficient to drive the development of existing products. What’s left for the need to explore and implement innovative solutions ?

This article discusses the advantages and practical uses of #IT outsourcing in the financial industry. Furthermore, we review some sensational digital trends in the sector along with accompanying statistics. ??

A Strategic Opportunity - The Role of Information Technology in Financial Services

?? Various Models and Services for Elevated Agility and Efficiency

IT outsourcing offers financial companies various collaboration models that provide swift access to specialized expertise, cutting-edge technologies, and essential services. A strategic #partnership with the right service provider can significantly streamline in-house IT operations by addressing knowledge and skill gaps and making the team's work more efficient. ?? This can accelerate work on specific #softwaredevelopment projects and reduce time-to-market. Seasoned and senior remote team members can add value to the workflow by sharing technical expertise and business know-how with the company's in-house team, augmenting the overall capabilities of the #financial institution. ??

A major benefit of #IToutsourcing is that it empowers financial services companies with the capacity to not only catch up with the latest technology trends but also leverage them to introduce innovations faster and gain a competitive advantage.

?? Enhanced Value for the Internal IТ Department

A financial company's in-house IT team can tackle its day-to-day tasks more efficiently by distributing some of the workload to outsourced team members. Such collaboration allows for expanding an internal team’s capacity and technical expertise and creates conditions for scaling a financial #business.

As an illustrative example, a large automotive finance provider turned to TSD for support in addressing the challenges related to the maintenance of its internal systems’ software development lifecycle. In response to growing business and technical needs, the company successfully expanded its IT department through the #staffaugmentation model. ??

TSD's vast expertise in financial services software development led to the establishment of a fruitful and long-standing partnership. More details are available in the ?? success story.

?? Round-the-Clock Utilization of Key Competencies

Financial companies have the valuable opportunity to benefit from the skills of outsourced IT staff even during non-working hours. ? This is possible when the IT vendor is strategically located in a convenient time zone that does not overlap with the time zone of the client or overlaps enough to allow for proper hand-off to remote team members. That enables the client to cover software development, testing, and support services within their in-house IT department at any time and achieve an uninterrupted cycle of financial systems maintenance and customer support.

As a result, information technology #outsourcing helps financial organizations preserve business continuity and ensures that critical functions are monitored and maintained at all times.

?? Drastically Reduce Development and Monitoring Expenses

For a growing financial business with escalating technology needs, IT outsourcing is also a method of cutting operational #costs while at the same time scaling #capacity. These expenses encompass the overheads related to personnel recruiting, onboarding, and training, taxes, office and technical equipment, employee benefits and perks, etc.

For instance, one of our clients, a US-based lending services provider, optimized development, and monitoring costs through an offshore staff augmentation partnership with TSD. ?? We supported the company with the rich application development and system administration expertise of our IT professionals. You can learn more about the collaboration process and the achieved results ?? in the case study.

?? Exploring New Frontiers with Customer Experience

Another area to which IT outsourcing can contribute is customer experience. End customers of financial services companies can benefit from timely enhanced, modernized, and more user-friendly financial software products with elevated quality of maintenance and customer support. Involving an outsourcing service provider in the development of financial software platforms helps to tailor them more easily to the requirements and preferences of business users through faster delivery and added value. ??

?? Mitigating the Risk of Cyberattacks

Another role of information technology in the financial services industry is protecting and storing sensitive information. For a company in this industry, cyber security may become a serious deal-breaker.

2021 data from Cisco highlights #cybersecurity as one of the leading IT outsourcing trends. In their report, 85% of companies say cybersecurity has become even more relevant than before the pandemic. And 66% of companies note that cybersecurity funding will increase significantly. A NewtonX survey found that 56% of organizations now outsource up to a quarter of their cybersecurity staff. ??

Therefore, for financial services organizations, a partner with strict cybersecurity policies and relevant certifications is increasingly in demand.

?? IT Trends in the Financial Industry

Double Down on Process Automation and Artificial Intelligence

Financial companies are applying automation and #artificialintelligence to improve the efficiency of their operations. The effect is felt both in the back-end and in customer interactions.

Automation takes the burden off repetitive processes and limits the number of manual errors. McKinsey claims that in approximately 60% of occupations, at least one-third of workday activities could be automated. One example of the added value of #AI for financial businesses is the technology's ability to process large volumes of data quickly and accurately to support critical decisions.

Read the full blog post ?? here and find out all the advantages and practical uses of IT outsourcing in the financial industry.

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