Financial companies rely on security MSPs to face mounting regulations

Financial services companies will continue turning to MSPs in 2022 for IT and security services.

The list of the top 100 managed service providers developed by SC Media’s sister brand ChannelE2E reported that IT spending in the banking and investment services market grew 7.1% to $596 billon in 2021 versus the year before.

These numbers bode well for financial MSPs: the ChannelE2E report said the leading MSPs serving the financial sector had an average recurring revenue of $16.7 million in 2021.

Bernard Marr & Co. was quoted in the report saying that the five biggest IT trends driving growth in banking remain mobile, cloud, AI/ machine learning, blockchain, and a focus on the overall customer experience. All the banks want to offer the mobile app that consumers will use.  

Despite all these positive number, there are some cautionary signs: Deloitte predicts that U.S. commercial banks could suffer up to $254 billion of net loan losses from 2020 through the end of 2022. Amid that backdrop, Deloitte said the banking industry will blend cost reduction strategies and business growth initiatives. The other major unknown revolves around Russia’s invasion of Ukraine and the associated financial market implications worldwide

The good news: there’s a very good long-term outlook as Gartner forecasted that IT spending will generate a 6.5% compound annual growth rate through 2025.

Today, financial services companies are facing many new regulatory pressures in addition to increasingly sophisticated attack methods aimed to compromise their data and operations, said David Andrade, CEO at ECI, the No. 1 financial vertical company on the ChannelE2E list.

Andrade said in the United States, the new cybersecurity rules proposed by the Securities and Exchange Commission essentially established security best practices as mandatory for compliance. He said many firms will rely on technology partners and MSPs to ensure they create and maintain a security posture aligned to these proposed requirements.  

"At ECI, we are advancing our cybersecurity governance and risk solution to help our clients adapt and maintain compliance, while always protecting themselves in a rapidly changing threat landscape,” Andrade said. “We do this through improving cyber hygiene and embedding security processes and technology into everything they do. Additionally, we’re investing heavily into our SIEM and our own security operations center to monitor threats and — most importantly — act quickly on suspicious activity.”

Cyber risks have been escalating rapidly and most financial services firms have insufficient security services, or they’ve bought a handful of security software tools through multiple vendors, said Rob Stephenson, CEO at Thrive, the No. 2 company on the ChannelE2E financial services vertical MSP list. However, Stephenson said very few financial services firms have a comprehensive security program that performs risk analysis and remediates any gaps on their behalf. 

“Thrive has made a substantial investment into a security orchestration automation and response (SOAR) engine for our security practice, as well as doubling the size of our cyber team and tripling the size of our vCISO consulting group that assists our financial services customers with complex security issues over the past year," Stephenson said.

With employees working both in office and remote, our clients have realized how important it is for an MSP to manage their IT, said Chris Grandi, CEO of Abacus Group, the No. 3 company on the ChannelE2E vertical list.

“We've been able to ensure our clients maintain security controls, meet compliance requirements, and experience a seamless workflow, no matter what device is used or where it's located,” Grandi said.

Here is a list of the Top 5 Financial MSP companies: