Financial services have rarely been short of transformation agendas. Yet, there is a growing sense that something isn’t adding up. As Manuel Pincetti, Partner at Monitor Deloitte, argued in his keynote at OWIN26, the pressures the industry knows well — client expectations, regulatory fragmentation, market expansion — are now hitting simultaneously and reinforcing each other. Their interaction has made complexity structural, not cyclical.

And the industry’s instinct to spend its way out has not kept pace: technology budgets have grown in step with assets under management, yet only 28% of financial institutions report having achieved genuine end-to-end scalability across front and back-office operations.

More than 90% of executives identify legacy technical debt as a growing drag on innovation. A significant share of IT spend is locked into maintenance, infrastructure, and operational run-the-bank activities. Compliance absorbs what remains.

As Pincetti emphasises, “Scaling becomes difficult when an increasing share of technical and operational spend is locked into un-compressible items.” 

This is not a problem that more investment resolves. It is a structural problem — which means it requires a structural response.

The real lever: how you source, not how much you spend

This marks a subtle but important reorientation. For decades, operating models have been designed around ownership – of infrastructure, of applications, of capability. Increasingly, that assumption is being challenged by models that prioritise access over ownership, and orchestration over control.

Across the market, organisations are moving along a spectrum: from traditional build-and-run approaches, through outsourcing models, into hybrid SaaS environments and fully integrated as-a-service ecosystems. What was once peripheral is now moving into the mainstream, with innovative sourcing models growing from less than 10% of spend five to six years ago to nearly 18% today.

The direction is clear. “The lever is not only investment. It is sourcing design.” Pincetti argued.

Much more than a delivery model

As-a-service models is not simply a matter of cost optimisation. It changes the shape of what institutions need to carry internally. It reduces complexity by moving non-differentiating activities into specialised ecosystems. It enables configurability at scale, allowing institutions to move beyond rigid “adopt or reject” decisions towards more adaptive design choices. And it converts capital-heavy commitments into operational models tied more directly to outcomes.

“Beyond simply managing complexity, partnerships give banks access to specialised capabilities that are too costly to build internally, while also providing the flexibility to scale during peak demand or transformation initiatives.” – Thomas de Nil, Head of Savings & Investments at vdk bank

The principle that emerges is deceptively simple: retain what differentiates, externalise what scales.

“Focus on your front-end, your clients, and your customers—let your partners take care of the rest.” – Karl de Borger, Head of Sales & Relationship Management at KBC Securities Services

AI sharpens the case. Treated as an isolated transformation agenda it arrives with a familiar set of problems: –regulatory uncertainty, data fragmentation, resource intensity, and talent scarcity not easily resolved within traditional operating models. Treated as a component of an externalised service ecosystem – where compliance, infrastructure, and expertise are already integrated — it becomes something more manageable and more durable.

“AI is no longer a discrete technology but a structural component, and the real question is not ideological - it’s pragmatic: which AI workloads are sensitive enough to require sovereign, governed environments, and how do we make AI repeatable, defensible, and a long-term competitive advantage?” – Morgan Polidori, Sales Lead Vertical FSI and Strategic Accounts Italy at Equinix

The deeper implication is one that the industry has been slow to absorb: this is not a project. It is an operating model redesign question. Too often, institutions approach transformation as a sequence of isolated initiatives - system upgrades, platform migrations, process optimisation programmes. The result is movement without coherence. The architecture changes, but the underlying logic doesn’t.

“The goal is building infrastructure that truly matches what operating models need — partnering with the right providers, turning complexity into clear choices, and creating a foundation where businesses can run, scale, and deliver on every customer expectation.” – Florindo Pascarella, Pre-sales Solutions Architect at Dell Technologies

Moving into as-a-service models forces a more fundamental reckoning: what does the organisation actually differentiate on? What can be externalised without losing control? How is value created across a distributed ecosystem of partners rather than within a single, owned stack?

“The most critical step in working with external partners is clearly defining scope—what is needed on day one, what can scale over time, and just as importantly, what will deliberately remain in-house.” - Thomas de Nil, Head of Savings & Investments at vdk bank

Crucially, this is not a technical exercise. It is a strategic one.

And scalability Leaders seem to know this already. Their as-a-service adoption is materially higher than Followers across the board — from tax and regulatory reporting (84% vs 48%) to client onboarding (79% vs 39%) and portfolio management (56% vs 28%). The breadth of that gap, more than its depth in any single area, points to a fundamental difference in how operating models are designed. Leaders are not building scale through internal transformation alone — they are extending it through as-a-service models where these improve resilience, throughput and specialist capability.

The new centre of gravity: Trusted Partnership

As financial institutions move further into as-a-service models, the conversation shifts from what to externalise to who can be trusted to operate with it. The notion of a “vendor” becomes increasingly insufficient, and the role of ecosystem partner comes to the fore.

“Partner’s role is to absorb complexity so wealth managers and advisors can focus entirely on their client relationships.” – Dennis Wallestad, Head of Pershing EMEA at BNY Pershing

A partner operates as an extension of the organisation rather than an adjacent provider: aligned on outcomes, responsive to change, and engaged not only at delivery milestones but across the full lifecycle of the relationship, from commercial negotiation through implementation and into daily operations. That level of integration is built on something fundamental.

“Trust is not a milestone in the relationship; it is the precondition for scale. Partnerships need transparency. Without it, you simply don’t build the trust needed to make it work.” — Alexander Cassar, CEO UK at Objectway

Beyond trust sits a more practical requirement: the ability to operate across jurisdictional complexity without either flattening it or drowning in it.

Financial services is a patchwork of regulatory regimes, tax frameworks, supervisory expectations, and local market practices. A partner that imposes standardisation where local nuance is competitively relevant destroys value. One that rebuilds everything from scratch in every market is not scalable. What the right partner offers is something in between: operating patterns that are modular by design, but configurable where true differentiation matters.

“The central tension lies between standardization for scale and efficiency, and customization for competitive differentiation.” — Karl de Borger, Head of Sales & Relationship Management at KBC Securities Services

This capability extends into ecosystem orchestration. Delivery today is rarely linear or single-provider. The right partner is able to operate effectively in multi-party environments where accountability is explicit, interfaces are stable, and coordination is structured. In these settings, success depends less on integration effort and more on disciplined orchestration.

“Financial services firms are built on interconnected ecosystems — collaboration, security, scale, and zero downtime are not choices, they are design principles. The key is keeping it simple: scalability and resilience must be engineered from the beginning, with IT serving as a business enabler, not a cost center.” – Stefano Zai, Business Development Manager, IT Services Division at Ricoh

Taken together, this profile is not defined by the sheer scale of capability, but by the quality of fit. The right partner does not eliminate complexity—they make it governable within a system designed to scale.

What scale actually means now

The ambition to scale has not changed, but what has changed is the definition of scalability.

Scale is no longer about building larger systems or deploying more technology. It is about designing organisations that can continuously reconfigure capability across internal and external boundaries, in response to a structural environment that will not stop shifting.

The institutions best positioned to navigate that environment are not necessarily the ones with the largest budgets or the most advanced technology. They are the ones that have learned to structure differently: building less, sourcing more intelligently, and treating complexity not as a problem to be eliminated, but as a condition to be governed.

That is the transformation that actually matters. And it is architectural, not digital.