Scalability as a key consideration for outsourcing
Outsourced partners offer excellent capacity when a firm wishes to scale, and the right partner supports the company with the overall strategy towards growth.
Written by George Ralph, Global Managing Director at RFA
There are many factors that firms should consider when selecting an outsourced provider and scalability is of key importance. Scalability is key to adapting to changes and any upsurges of demands due to deal flow. It can be a key consideration for departmental organisational structures, to systems and to applications. If businesses partner with an outsourced provider who can help elevate the performance of the teams and systems, then a firm can operate at its maximum output.
There have been key industry shifts such as organisations having to cope with larger volumes of data and compliance teams having to manage more onerous reporting obligations. This adds pressure to a firm’s capacity to carry out day to day operations. What’s more, the burden of this data management impacts the design and implementation of technology used to handle it. If poorly managed, then data gathering points can become fragmented and a source of irritability for investors. In addition to managing data loads, firms need to be able to adhere to a growing list of compliance requirements. It is a pressure that has been felt in the financial industry as according to Statista, 53% of businesses operating in the sector opted to outsource to provide additional assurance on compliance processes in 2019. 48% of firms reported that their key driver for outsourcing is due to a lack of in-house compliance skills.
Outsourced partners offer excellent capacity when a firm wishes to scale, and the right partner supports the company with the overall strategy towards growth.
Choosing an outsourced partner for compliance and data management can help drive scalability as businesses can then turn their own focus towards projects that drive growth. Staff are able to focus on servicing clients and managing operations during peak activity periods instead of managing compliance and data reporting burdens.
In today’s climate, M&A is subjected to greater risks which can often be a result of a lack of Due Diligence. This is absolutely mission critical for any M&A transaction. Companies should carry out Due Diligence to ensure their selected outsourced partner is not then outsourcing themselves, as this means the potential partner might fundamentally not have a full 360 view of the work they have been tasked with.
Outsourced partners offer excellent capacity when a firm wishes to scale, and the right partner supports the company with the overall strategy towards growth. Providers who specialise in outsourced support can help leverage economies by picking up any additional operational requirements as firms scale up.
Let us not forget, firms are operating in a landscape of increased cyber threats. In June 2022, Forbes reported that ‘in 2021, the average number of cyberattacks and data breaches increased by 15.1% from the previous year’. The same article detailed that ‘in 93% of cyberattacks, an external attacker is able to breach a company’s network perimeter and gain access to local network resources’. The digital climate today is awash with risks and as a means to manage and mitigate these threats, firms need an advanced level of expertise, knowledge and experience. An outsourced partner who specialises in cybersecurity can be the most cost-effective way for ensuring a firm’s risk management is adept at handling the challenges of the digital landscape. Investing in an outsourced cybersecurity solution can help firms with scalability by overcome inefficiencies and ensure that teams are able to carry out their work in a manner that is safe and secure by ongoing monitoring and stress testing. The FCA and SEC provide guidance on working with outsourced partners and third party vendors to support firms who choose this route.
Outsourcing empowers firms to be able to manage market changes efficiently and effectively across the cyber and regulatory landscape, as well as managing scalability for day to day business and deal flow.
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