The number of IT vendors supplying products and services to banks and financial institutions is growing. Results of a recent survey we conducted show this number averaging at just over 10 IT suppliers per respondent. This backs up the macro trend for organisations to have 20+ IT suppliers in the coming years as reported by research firms such as Gartner. There are many advantages of a multi-supplier ecosystem, including: flexibility, avoidance of vendor lock-in, collaboration, innovation and growth opportunities.
So, what’s the problem?
Life is getting a lot more complex for IT leaders in the financial services sector. Regulation, such as the impending PSD2, is increasing pressure on banks to open up IT systems. At the same time, shadow IT is growing and cloud adoption, often ill-considered by business units, is on the rise. Vendors are redesigning ERP systems to be more disaggregated.
Legacy systems continue to require maintenance while digital business and the Internet of Things is fast becoming a reality. This means that IT leaders have to deal with multiple challenges, multiple systems and multiple suppliers. In this scenario the issues can include: increased overheads, opportunity loss, a lack of standards, ‘blame-games’, incomplete view of TCO and inadequate risk and compliance management.
What can you do?
There is no one-size-fits-all solution, but having a Multi-Source Integration (MSI) strategy can highlight any gaps that may exist by assessing your vendors’ capability and willingness to collaborate fully in an ecosystem. It will also identify KPIs for effective supplier performance in the ecosystem and help you renegotiate contracts, SLAs and OLAs.
More and more financial services companies are spending more and more money, managing more and more IT suppliers. Life is going to get a little bit more complex.