INSOURCING VS. OUTSOURCING: 

The impact of COVID-19 has proven to be a real-life stress test for investment operations, prompting many leading institutional investors to reevaluate their operating models.   In a year like no other, managing risks and generating returns are now top priorities for CEOs, while back and middle-office functions from trading and technology to administration and reporting are under review.  Does it make sense to keep these in house, or is now the right time to outsource some or all?

As industry leaders look beyond the current crisis, what is the most effective operating model for institutional investors as they face new demands around cost control, resilience and scalability?  How can they achieve the right mix between insourcing and outsourcing and what are the critical factors for success?  And, as they consider the range of outsourcing options on offer, from technology to full business process, how important is the partnership between client and provider as they find the optimum framework that is fit for purpose both now and for the long-term?  

In the second of a series of live webinars hosted by the Financial Times in partnership with State Street, this virtual event will gather investment leaders to analyse the key issues when considering the insourcing and/or outsourcing of investment operations.  Our speakers will separate fact from fiction in weighing up the pros and cons of each approach.

• The pandemic has affected how investment organisations think about outsourcing vs insourcing, and hybrid models.  Its sudden arrival had an immediate effect on businesses, testing their systems, processes and competencies, and the strength of their relationships with external partners and suppliers.

• Communication with outsourced suppliers has become critical in recent months. Providers have become more aware of and involved in client operations and are looking to be the ‘secret sauce’ for customer success.  Clients are performing much more due diligence on what they need from service providers.

• Outsourcing is about much more than cost savings.  In the current environment outsourcing of business processes and analytics can result in efficiencies in scale and as a way of exposing staff to new skills and tools.  It can also free up employees to work on core business functions.

• Services requiring knowledge and the ‘human factor’ are seen as core to the investment business and are, to a large extent, being retained in-house.  The client experience for investment institutions remains critically important, especially amid the current uncertainty.

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