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Managing Big Data with IT Outsourcing

by internationaldirector

Written By: Susan Smithfield – Corporate Finance

Information-technology (IT) outsourcing is being applied increasingly in all areas of business—in particular it is growing in application in the banking and financial-services sector. IT outsourcing provides many benefits, in particular significant cost-cutting. In addition, IT outsourcing leads to the application of the best talent to particular tasks—giving business processes agility, increased efficiency and boosted success rates. By applying IT outsourcing teams, banks can adapt more quickly to changing market dynamics when compared to traditional DIY (do it yourself) approaches. At the same time, banks and financial institutions can apply the cost savings generated into other areas of investment—further fueling profitmaking overall. 

We live in an age in which data is being collected and generated in massive amounts every second. Technology has been developing at a breakneck pace, and the services and transactions that can now be carried out through digitization have been growing at an even faster pace as new solutions, tools and demand are born. When it comes to banking, big data is more prevalent than ever, and managing the masses of data securely and effectively is a sizeable challenge. Privacy, security and accuracy are vital, and IT outsourcing specialists can most effectively handle the capacity involved to the standard required. 

As such, outsourcing large application-management and big-data generating processes has reached record levels in the banking sector as part of taking on this massive challenge. The sector of IT outsourcing is booming and becoming increasingly effective as more resources are allocated into developing specialist expertise. This skilled labour is growing ever more effective and tackling specific problems and meeting targeted goals. The contract values of these IT outsourcing projects are reaching the levels of billions of dollars each year as more and more businesses see the substantial value added to their operations.

In particular, banks and financial institutions have been seeking to outsource IT applications and the big data concurrently generated and processed in three key areas. Firstly, there is the actual system to run big-data based applications. IT outsourcing businesses can provide specialist tools and services to handle data in mass and process the necessary outputs. This can be extremely valuable to banks. For example, when an internal system has crashed from managing a big-data process, the system downtime can be substantially damaging to work flow and profitmaking when aggregated over a financial year. By outsourcing this type of system, the likelihood of failure and error is minimised, and the benefits far outweigh the potential costs and risks created by not applying specialist expertise. IT outsourcing firms maintain a cutting-edge approach in all areas of operations so that they can provide tools that meet evolving demand. This can lead to cost reduction and enhanced efficiency in banks—especially when it comes to managing the big data that can lead to huge inaccuracies if handled without proper care.

Further to this, as global banking regulators attempt to keep pace with technological innovation, they are creating new rules and restrictions regarding big-data management processes and procedures for banks and financial-services institutions. This leads to the second key area of IT outsourcing that can help banks manage big-data challenges. IT outsourcing firms can ensure the most effective level of regulatory compliance whilst in some cases providing cybersecurity services. These services can lead to cost reductions and avoidance of penalties for banks. Further to this, these business-level risk issues are paramount in successfully maintaining ongoing operations in today’s increasingly competitive banking marketplace—with competition being exacerbated by smaller fintech (financial technology) firms who are providing cutting-edge solutions at lower costs due to lower overheads. 

Finally, the third key area in which IT outsourcing can help banks manage big-data challenges is within the area of enhancing profit generation—directly helping the business grow and generate increased revenues. IT outsourcing firms are able to work with banks in setting up systems and tools that can be used to come up with new products and solutions for customers. Big data can be a powerful resource that if harnessed correctly can lead to significantly increased profit margins—through trend analysis and market forecasting, for example. By enlisting the services of IT outsourcing companies, banks are able to turn big-data ideas around more quickly into profits. As specialists in developing bespoke tools with accuracy and precision, this area of expertise can be of extremely high value over both the short- and long-term and for banks of all sizes. 

Digital transformation across all areas of banking and financial services means that data and information are being collected and generated in amounts larger than ever before. IT outsourcing firms can help banks in this evolving and rapidly growing area of operations—not only in mitigating risks but also in directly generating larger profits.

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