Let us pause and reflect on what 2024 is due to bring to the banking industry. A slowing global economy may not make it easy for financial institutions (FIs) to generate more income and control costs. The foundational architecture of the banking and capital markets industry is expected to be impacted by drivers such as higher interest rates, reduced money supply, more assertive regulations, climate change and geopolitical tensions. The pace of development of new technologies and trends will also, as always, keep influencing business models and how customer needs are served.
More than ever, FIs will need to demonstrate conviction and agility to thrive. They will need to keep investing in modernizing their organizations to mitigate new risks and seize growth opportunities. While keeping their focus on managing costs with discipline, adapting to more complex regulations, accelerating technology transformation and attracting talent. Without mentioning the need to offer an excellent service to their customers, meet investor expectations and plan for the future.
Managed services: a key to unlock opportunities
Many companies across a broad range of industries have turned to managed services to enable transformation towards becoming more customer-centric, agile, compliant and cost-effective. According to Global Data, the global managed services market was valued at US$ 789.35 billion in 2022 and will grow at a compounded annual growth rate (CAGR) of 13.36% to reach a value of US$ 1,477.41 billion by
2027. This gives evidence to how much businesses are increasingly relying on managed services as a core tool in their strategy and execution.
While many companies started outsourcing to take cost out years ago, they now choose managed services to also add value across all components of their business. By removing complexity managed services can be a game-changer: truly transforming operations, enhancing performance and fostering innovation. Managed services help free up staff across the organization, so they can add more value and focus on what drives growth and strengthens competitive advantage in a fast-evolving and increasingly complex world.
Every business adopts a unique managed services journey to meet their business needs and market opportunities. However, the main reasons FIs often choose a managed services-enabled approach are summarized as follows:
Operating with more agility
Successful transformation can only be delivered through real, sustainable change. FIs are conscious that they need to reshape, innovate and grow.
Leveraging state-of-the-art capabilities with no CAPEX burden
Shifting to a managed service model can help avoid the investment in the build and upkeep of infrastructure, software, tools and other capabilities, which are non-core to a business. With managed services, FIs set the outcome they want to reach and then can leverage the expertise and technology of their chosen partner.
Innovating faster and smarter
Managed services enable secure, rapid and cost-effective access to technologies such as automation and advanced data analytics with true economies of scale and no upfront costs. FIs can access robust insights to define and execute their innovation strategy better and faster.
Maintaining compliance seamlessly
With industry and regulatory obligations constantly changing, ensuring compliance is becoming increasingly challenging. Managed services projects follow a holistic approach and eliminate silos, putting together the most advanced technology and the industry’s best experts. This ensures that security, risk management, efficiency and compliance are at the heart of any transformation project.
Learn more about
Diebold Nixdorf's managed services offerings.
Originally published in
Global Banking and Finance Review
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