Hedge fund firms are reevaluating their options with respect to in-sourcing versus outsourcing IT management, according to the results of a survey by Agio, a cybersecurity and managed IT provider for financial services firms.
The survey, conducted earlier this year, which captures the opinions of recent, current, and future technology management and information security programmes, from 100 hedge fund practitioners across the technology, operations, cybersecurity, and compliance fields, reveals that looking ahead to the next two years, 89 per cent of firms that currently in-source IT management said they are likely to allocate more spend to outsourced services.
The driver behind this shift is a need for heightened security (54%), increased access to public cloud management and support expertise (46%), and more responsive end-user support (44%).
Of those firms already outsourcing IT management, 91 per cent said they are likely to switch providers. Among the largest hedge funds that currently outsource (funds with +$5 billion AUM), nearly two-thirds (64%) reported they were likely to change service providers in the next 24 months because their current vendor is unable to support a public cloud environment.
In discussing how the managed service provider (MSP) model will change in the coming years, respondents predicted providers will employ artificial intelligence to remove service friction and increase service uptime (47%), as well as to enable support agents to be more responsive when issues do arise (47%). Most firms (51%) also predicted that MSPs will soon be measured and compensated by how well they limit break-fix issues versus how many issues they resolve.
