By Alastair Watson, Managing Director, EMEA, TNS Financial MarketsÂ
In the financial services industry, particularly within banking, many functions like staffing and IT have long been outsourced. One area increasingly gaining attention is trading infrastructure. Once valued for its control and customization, in-house infrastructure has often become complex and costly to maintain.
MSPs are at the forefront of providing innovative solutions for optimizing trading infrastructure and office-wide operations for financial institutions. As banks face challenges such as a potential shortage of new talent entering the workforce, the increasing complexity of new technologies, and a greater emphasis on risk management, MSPs are stepping in to bridge the gap.
Top infrastructure talent
One main challenge banks face with in-house infrastructure is key person dependency. The critical knowledge required for successful operations can often be confined to a small group of individuals. If these key personnel leave, banks may struggle to implement necessary changes, increasing risk exposure.
With a potential shortage of new talent entering the banking infrastructure space, some MSPs are ramping up hiring efforts and deepening their expertise to meet this growing demand. By providing specialized knowledge, MSPs can help banks enhance their operational continuity.
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A hybrid approach for cloud
Banks have been adopting cloud strategies for several years, but many trading use cases still lack full support in cloud environments. Banks are then pressured to maintain a hybrid infrastructure that combines cloud-based solutions with their own digital frameworks.
MSPs can be valuable in bridging on-premise and cloud services. Their hybrid models can provide scalable, virtualized solutions to help meet evolving demands. This collaboration can help shift banks away from the traditional approach of procuring software and managing infrastructure independently.
Lower maintenance costs
As banking profits may narrow due to commission compression, cost efficiency often becomes a top priority. High infrastructure maintenance costs are becoming harder to justify, making MSPs an attractive solution.
MSPs can mutualize infrastructure costs across multiple clients while safeguarding each bank’s proprietary data. Providers like TNS offer tailored risk management solutions and robust security frameworks, ensuring both data protection and regulatory compliance.
Seamless implementation
Real-time data is often crucial for banks seeking a competitive advantage, but efficiently processing these large and diverse datasets can remain a challenge. The increasing demand for data center space and processing power can further exacerbate this challenge.
MSPs provide comprehensive, vetted data solutions, which would otherwise require significant time and resources for banks to manage independently. Moreover, MSPs like TNS already have established infrastructure all around the world. In more established markets like New York or London, data center space and power can be constrained so leveraging an MSP’s existing footprint can be essential. On the other hand, more emerging markets like Johannesburg, Brazil, India or Korea can propose challenging deployment hurdles that an MSP can solve with their existing presence. Instead of waiting several months for a new colocation site, collaboration with an MSP can reduce setup time to just a few weeks.
The role of MSPs continues to expand, driving the industry toward more streamlined and resilient trading infrastructure solutions. Their ability to help mitigate risks, reduce time spent on operational tasks, and provide comprehensive support is reshaping how financial institutions approach infrastructure management.
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