Firms Embrace Outsourced Services

The rapid evolution of the financial services sector and continued change in market conditions have increased the popularity, viability, and adoption of outsourced (i.e., managed) services, a model that is forecast to reach more than 200% of today’s market capital by 2028.^[1] For financial institutions, the growing reliance on managed services is driven by increasing cost pressures and ever-changing regulatory requirements that have created new urgency in the search for solutions that enhance operational efficiency and service quality.

For decades, managed services have been a driving force behind the growth of the world’s largest banks. As regulatory compliance, onboarding, and operational due diligence became more complex, banks began passing these processes to service partners to streamline operations and augment internal capabilities on demand.

The past few years have changed the service landscape dramatically for smaller firms, as well. Advances in technology, the maturation of service delivery models, and a host of new industry pressures have raised the stakes, making managed services simultaneously more accessible and more urgently needed than ever before.

Innovation is Rewarded

S&P Global Market Intelligence “Regulatory & Compliance Division” is proud to be the winner of FTF New’s Best Outsourcing Provider Award for 2024. “Enhancing efficiencies and doing more with less have increased the demand for managed services, plus the need to keep up with the ever-changing technological landscape,” says Brittany Garland, Head of Regulatory & Compliance at S&P Global Market Intelligence. “That is where firms can see an edge because we bring together our extensive datasets and technology capabilities when providing them with an outsourced solution.”

The firm’s clients are concerned with keeping up with rapid technological change and are looking for data and outreach for regulatory requirements in a way that is efficient and provides the ability to easily scale. When it comes to client onboarding, time to market is critical. The exchange of counterparty information and trading agreements is critical to opening a trading relationship in a timely fashion. The extensive and varying documentation requirements to meet regulatory obligations can be complex and time consuming to manage. Manual processes and silo datasets may lead to an increased risk of incomplete or erroneous data, which can cause delays in trade settlement.

“We need to thoroughly describe the steps involved with outsourcing, so our clients understand the overall process,” says Brittany. “In addition, we always take client input and incorporate that into our work throughout the lifecycle of a project to make it a very collaborative process.”

Crucial Technologies for Regulatory Reporting and Compliance

Firms are looking for best-in-class technology to manage risk, comply with regulations, and meet their tax obligations. They need to create a single source of truth with accurate, timely information about their customers and vendors and be able to efficiently exchange information in a secure environment. The right solution for risk and compliance management can help them reduce costs, reuse information, and streamline processes.

“Our Counterparty Manager solution really sets us apart,” says Brittany. “It is the industry standard for counterparties to manage the onboarding workflow by sharing client, tax, regulatory, constitutional documents, and data to support account onboarding, Know Your Client (KYC) requirements, credit, tax, and legal review. This is complemented by Client Lifecycle Management (CLM Pro) that is a lightweight, highly configurable, end-to-end solution. From contract initiation to account closure, CLM Pro makes the entire lifecycle management process efficient, transparent, and easier to navigate for everyone involved. Then Outreach360 provides a centralized client outreach platform that creates, manages, sends, tracks, and stores information and communication within a secure, automated environment.”

Challenges of an Evolving Regulatory Environment

There is a constant stream of new and changing regulations that companies must adhere to, especially if they are multinational organizations. This can be very difficult to navigate and avoid penalties associated with non-compliance. There is an increasing need, and growing appetite, for firms to work smarter by outsourcing aspects of regulatory compliance and due diligence. In addition to providing access to specialist expertise, outsourcing offers an agile scaling model that supports rapid growth to meet the growing demands.