Blog | Aug. 19, 2021 | 5 min read How vCIO Services Enhance Your Institution’s IT Strategy TwitterFacebookLinkedInEmailMessengerThe world of IT is ever-evolving, requiring continuous resources and dedicated effort to ensure your strategy aligns with current technology and business objectives. For some financial institutions, hiring and retaining a full-time executive IT role—such as a chief information officer (CIO)—is not always possible. Partnering with a trusted managed services provider (MSP) for virtual CIO services allows institutions to outsource their IT strategy and planning to an experienced consultant. What Is a Virtual CIO (vCIO)? A vCIO is affiliated with an MSP and draws from years of experience in working with institutions from a wide range of sizes and varying markets to provide objective feedback. Think of working with a vCIO like having a seasoned lawyer on retainer. Your vCIO is available to offer guidance on almost any topic relating to IT, financial services and compliance, including how institutions can best leverage technology to achieve their goals and develop an IT infrastructure road map. Unlike an auditor, vCIOs approach issues from a risk mitigation and business perspective. vCIOs are well versed in the regulatory mandates from the Federal Financial Institutions Examinations Council (FFIEC) and provide practical, actionable and reasonable feedback to mitigate risk without sacrificing completion of business objectives. Such guidance is valuable for all institutions but may be especially beneficial for larger institutions or those experiencing rapid growth. What Does the FFIEC Say about Outsourcing for vCIO Services? The FFIEC has not recently updated their guidance for outsourcing technology services, and their focus on the topic—especially when included in other guidance documents—is primarily around vendor management and risk. As a regulatory body, their mission is mainly on safeguarding the financial system while protecting depositor assets and consumer wellbeing. Your institution’s senior management and all other stakeholders should read FFIEC guidance on outsourcing to better understand the regulatory perspective and concerns around this topic. The FFIEC cites various reasons for outsourcing, including gaining operational efficiencies or increasing availability of services. Additionally, the FFIEC recently issued the Architecture, Infrastructure and Operations (AIO) booklet which replaces the Operations booklet issued in 2004. The updated title demonstrates the importance of an entity’s architecture, infrastructure and operations as well as the expanded role of IT. According to the FFIEC, this booklet provides a foundation for understanding the principles and practices within the functions of AIO and does not impose requirements on entities. By partnering with a vCIO, you will gain a resource for leveraging this FFIEC guidance and ensuring your institution is prepared for upcoming examinations. Key Benefits of Partnering with an MSP for vCIO Services The inclusion of a vCIO helps to close the gap between your institution and MSP, providing you with someone whose primary objective is the achievement of your business goals. Partnering with an MSP for vCIO services allows you to leverage industry expertise of an IT professional and delivers a variety of benefits to your institution, including the ability to: Leverage a Strategic Advisor: By embracing vCIO services, your institution gains an impartial advocate and trusted advisor. Due to their deep understanding of an institution’s business objectives, a vCIO can spot misalignment in proposals and everyday interactions between the institution and the MSP, often working to proactively reconcile issues to drive progress. Access Research and Guidance: A well-designed vCIO program provides access to a team of experienced executive-level experts that live and breathe fintech. If your institution is seeking insight into an emerging or existing technology, a vCIO delivers research and a broader perspective on changes occurring within the industry. A strong program also includes access to an ever-expanding library of policy and guidance documents with a wide variety of information and available templates for institutions to adopt. Gain a Sounding Board and Confidant: Regardless of an institution’s size, it is not uncommon for IT leaders to be confronted with challenges, often finding a lack of external confidants to consult for advice and differing perspectives. With the addition of a vCIO, IT leaders can consult an entire team of experienced IT veterans that will share experiences and offer non-biased analysis. Enhance Scalability: Perhaps one of the primary reasons for outsourcing is the need to gain scale to better facilitate the achievement of business objectives. Financial institutions are in the business of delivering the latest financial services, and IT is a tool used to accelerate these services while safeguarding the data of customers. Considerations When Outsourcing for vCIO Services As you determine whether it is time for your institution to embrace vCIO services to enhance your IT strategy, review the following considerations: Need for Internal IT Support: While convenient to believe outsourcing eliminates the need or burden to maintain any internal support or investment, this is not true. You may outsource a function such as audit, IT support or HR, but that does not mean your institution no longer requires in-house staff in possession of specialized knowledge or skills. You may not require a large internal team, but your in-house staff should function as a liaison with the MSP and handle localized tasks which are often more efficiently accomplished internally. Ultimate Responsibility and Oversight: While the MSP does have significant responsibility to the institution which is normally expressed through contractual commitments, the FFIEC stresses that senior management and the board of directors hold the ultimate responsibility for the management of risk and oversight of the institution. This means the institution must maintain adequate oversight and control over the interaction and coordination of efforts between the institution and the MSP. Effect on Business Continuity: The decision to outsource with a trusted MSP should be accompanied by specific changes to your business continuity plan (BCP). The impact of outages and disruptions change significantly in an outsourced scenario depending on the scope and nature of the outsourced services. Review your BCP and disaster recovery plan to ensure optimal incorporation and transition to outsourced services in the event of a service interruption. Want to Learn More about vCIO Consulting? Outsourcing your MSP services, along with vCIO consulting, enhances the ability of your institution’s leadership to strengthen internal IT and increase efficiencies. In many ways, a vCIO program is like a concierge service that boosts your probability for success while streamlining interactions between your internal leaders, the MSP, regulators and other vendors. Want to learn more about how vCIO services benefit financial institutions? Watch our on-demand webinar to learn best practices for business continuity planning and disaster recovery.