SunGard managing director for Australia and New Zealand Ashley Crawford said the level of complexity involved in the management of technology systems combined with the regulatory burdens relating to data are influencing firms to outsource third party expertise to reduce costs and regulate risk. 

Research by financial markets research firm TABB Group found that by 2016, around 50 per cent of financial institutions will use managed services to outsource the management of their IT infrastructures. 

Mr Crawford said managed services have the “benefit of increased agility, flexibility and responsiveness, faster time-to-market for new products and tighter security”.

“This model will become more mainstream in helping firms address the evolving challenges in our industry,” he said. 

Mr Crawford said if a firm chooses to manage its own data centre to house information onshore, this can create cost inefficiencies and also comes with a certain level of risk.  

“With these constraints in mind, firms can work with technology advisers who can help them resolve these challenges instead of building an in-house solution on their own, which can prove inflexible and difficult to adapt to changing market conditions,” he said.

Mr Crawford said one of the key trends SunGard is seeing among institutions is the use of third parties for the provision of data warehousing capability, which has become a regulatory requirement. 

“Outsourcing data warehousing helps firms to better focus on their core business to help drive profitability,” he said. 

Mr Crawford believes many Australian firms, regardless of what size and type of institution they are, will support business strategies with managed services models to “help address the complex and wide ranging challenges facing the industry”.

“As a result, third party specialists need to offer the security and scalability with both local and global expertise to help firms reduce complexity and focus on better serving their clients and growing their businesses,” he said.