We know the thought of changing your IT provider can feel like stepping off a familiar cliff. For finance firms, where downtime, data integrity and regulatory compliance are existential issues, the risks feel amplified.
Yet staying with an underperforming or risky supplier also carries real costs: operational interruptions, regulatory exposure and hidden expenses that can erode competitiveness. In plain terms: switching is scary, but sometimes necessary.
This guide explains, in straightforward language, why firms worry, how to decide if a change is needed, the real risks involved and practical steps to make a safe, compliant transition.
Why Finance Firms Worry About Changing IT Providers
Common Operational Concerns (Downtime, Data Loss, Business Continuity)
We often hear the same three worries: systems going offline, data getting lost or corrupted, and business processes breaking while systems are changed over. These are valid.
Historical incidents, for example the 2024 CrowdStrike outage that affected millions of endpoints and triggered regulatory scrutiny, show how a third‑party failure can cascade into a major operational incident.
The FCA has repeatedly highlighted that change failures and vendor outages are a common cause of material incidents: in 2019 roughly 17% of such incidents were linked to change failures. So, the fear of a failed migration is not hypothetical.
That said, the risk of inaction matters too. A provider with chronic reliability issues or weak security can cause frequent production outages, slower development cycles and, eventually, customer loss. We think in terms of comparative risk: what’s the likely impact of staying versus the likely impact of switching, and how controllable are those impacts?
Compliance And Regulatory Fears (MAS TRM, ISO27001:2022)
Finance firms operate in a tightening regulatory environment.
In Singapore, the Monetary Authority of Singapore (MAS) treats third‑party resilience as a top priority: its Technology Risk Management (TRM) principles and outsourcing guidelines require firms to maintain continuous oversight of critical suppliers.
International standards remain important: ISO/IEC 27001:2022 demonstrates a robust information security management system, and MAS TRM is often cited in global operations or used as a regional benchmark.
Switching providers risks gaps in audit trails, control ownership and evidence for regulatory reviews.
That’s why we prioritise partner credentials and a mapped handover of compliance controls, so regulators see continuity rather than disruption.
Hidden Costs, Contractual Penalties And Vendor Relationships
Contracts can hide financial traps: exit fees, notice periods, asset ownership disputes and dependencies on proprietary tooling.
Firms also worry about losing negotiated commercial terms or having to pay for parallel support during migration.
Beyond money, there’s the relational cost.
Long‑standing vendors know your historical decisions and bespoke quirks. Losing that institutional knowledge can slow projects.
We recommend a careful contractual review and creating a detailed cost model that includes one‑off migration expenses, parallel running costs and any penalty exposures.
Staff Disruption, Knowledge Loss And Change Resistance
People resist change, especially when their day job is to keep systems running.
Key staff may be protective of systems they built or maintained. If they leave during a switch, critical tribal knowledge goes with them.
We counter this by involving internal teams early, documenting runbooks, and securing formal handover sessions.
Keeping staff engaged often turns them into allies during transition rather than blockers.
How To Assess Whether A Change Is Necessary
Key Evaluation Criteria For CBD Finance And Asset Management Firms
We assess providers against several core criteria:
- Security posture and certifications (ISO27001:2022, SOC reports where applicable).
- Regulatory alignment (evidence that third‑party risk processes align with MAS TRM and MAS expectations, and with relevant international frameworks such as the FCA/PRA).
- Operational performance (uptime, incident frequency, mean time to repair).
- Service delivery and reporting quality (transparent metrics and regular, actionable reports).
- Sector experience and local presence, particularly important for firms in regulated markets.
For CBD finance and asset management firms, stress‑testing how a supplier supports regulatory reporting, custody interfaces and disaster recovery scenarios is essential.
Red Flags In Current Provider Performance And Reporting
Watch for these warning signs:
- Incomplete or irregular incident reporting.
- Recurrent, unexplained outages or slow incident resolution.
- Lack of proof of controls (no recent ISO27001 certificate or failing audit findings).
- Poor change management practices or frequent emergency patches.
- Inflexible commercial terms that make remediation or exit difficult.
If multiple red flags exist, staying is likely to increase operational and regulatory risk.
Quantifying The Cost Of Staying Versus The Cost Of Moving
We recommend a simple cost‑comparison model:
- Quantify the annual expected cost of staying: average outage costs, regulatory fines risk (probability × fine), productivity loss, and increased cyber risk exposure.
- Estimate the one‑off and transitional costs to move: project management, parallel running, consultancy, retraining and contract exit fees.
- Model the medium‑term savings and benefits: improved SLAs, fewer incidents, better compliance posture and potential for digital acceleration.
If the net present value over a 3‑5 year horizon favours moving, and risks can be mitigated, change becomes not just defensible but strategic.
Risks Of Switching And Practical Mitigations
Minimising Downtime And Ensuring Business Continuity
We mitigate downtime with a phased approach: pilot environments, scheduled cutovers outside business hours, and parallel running where both old and new systems operate until parity is proven.
Robust back‑out plans are essential, if a step fails, we must be able to restore the prior state quickly.
Also, runbooks and tabletop exercises simulate failure modes in advance so we don’t learn on the job.
Protecting Data Integrity And Secure Transfer Procedures
Data migration must be auditable and reversible. We insist on encrypted transfer channels, checksums to validate integrity, and end‑to‑end logging. Using a staging area for validation before final cutover reduces the risk of corruption.
Where sensitive client information is involved, retention and access controls must mirror or exceed the outgoing provider’s standards: we document chain‑of‑custody and include immutable logs for audits.
Handling Contracts, IP And Regulatory Audit Trails
Contract clarity is non‑negotiable.
We ensure responsibilities for data exports, retention of historical logs and licences are explicit. Intellectual property and bespoke scripts must be listed and transferred or licensed.
For regulatory audits, we maintain a ‘handover packet‘, evidence of continuity of controls, copies of policies, recent test results and a migration audit trail, so regulators see no control gaps.
Retaining Institutional Knowledge And Staff Handover Plans
We craft knowledge transfer plans that include shadowing, recorded walkthroughs, documented runbooks and a defined overlap period where outgoing personnel support the incoming team.
Incentivising key staff to stay through the transition, with short overlap contracts or retention bonuses, can save weeks of ramp‑up time.
Selecting The Right New IT Partner For Regulated Firms
Must-Have Compliance And Security Credentials (ISO27001, MAS TRM)
The new partner should present up‑to‑date certifications and evidence of third‑party risk management aligned to FCA/PRA expectations.
ISO27001:2022 is a baseline for information security management: where operations touch Singapore or APAC markets, familiarity with MAS TRM or equivalent frameworks is a strong plus.
Request recent audit reports, penetration test summaries and a clear remediation track record.
Service Levels, Local Presence And Sector Experience
We prioritise partners with demonstrable compliance experience—expertise in regulatory frameworks, policy and control design, AML/KYC, compliance monitoring and reporting, and audit-ready risk management.
Local presence matters for governance and rapid incident escalation, a partner on the ground reduces resolution times and aids regulatory engagement.
Clear SLAs with measurable KPIs (MTTR, availability, change success rate) and financial remedies for breaches are non‑negotiable.
Evaluating Project Management, Onboarding And Transition Capabilities
A competent partner must show a documented onboarding playbook, sample migration plans, and references from similar firms.
We look for dedicated transition teams, named project managers, and a willingness to run a pilot or proof of concept. Their approach to documentation, testing and post‑go‑live support is often the best predictor of a smooth change.
A Practical Step-By-Step Transition Roadmap
Pre-Transition: Audit, Risk Assessment And Migration Scope
Start with a comprehensive audit: inventory assets, data flows, dependencies and vendor contracts.
Conduct a third‑party risk assessment that maps business impact and regulatory criticality. Define the migration scope, success criteria and rollback triggers.
We recommend a formal sign‑off gate before any move: only when controls, test plans and resource commitments are approved do we proceed.
Transition: Phased Migration, Testing And Parallel Run Strategies
Execute in stages: non‑critical systems first, then progressively more critical services. Each phase should have:
- A test plan with acceptance criteria.
- A pilot period for user validation.
- Parallel operations until service parity is confirmed.
Maintain constant communication with business stakeholders and run daily standups during cutover windows.
Post-Transition: Monitoring, SLA Reviews And Continuous Improvement
After cutover, increase monitoring intensity for a defined period. Review SLA attainment weekly with the new provider, and hold a 30/60/90‑day retrospective to capture lessons and close any residual gaps.
Treat the migration as the start of a better partnership: continuous improvement and regular third‑party reviews keep resilience high and compliance evidence fresh.
Conclusion
Switching IT providers is a risk, but so is standing still. For finance firms, the right choice balances regulatory assurance, operational continuity and commercial sense.
By assessing red flags rigorously, quantifying costs over a multi‑year horizon, and executing a phased, well‑documented transition with certified partners, we can control the biggest risks and unlock longer‑term resilience and efficiency.
If you’re worried about the disruption, start by auditing your provider against the criteria in this guide.
A pragmatic, evidence‑led approach turns a frightening decision into a strategic move that protects clients, supports regulators’ expectations and positions your firm to compete more effectively.
We’re here to help firms through that evaluation and transition, thoughtfully, securely and with the regulatory context front of mind.
Frequently Asked Questions
Why do finance firms feel so much concern about switching from their current IT provider?
Financial institutions in Singapore worry because switching can risk downtime, data loss, audit gaps and regulatory scrutiny.
Given MAS’s strict expectations for operational resilience and continuous controls — and PDPC requirements for personal data protection — firms fear operational disruption and compliance breaches unless migrations are carefully planned and clear evidence of continuity is maintained.
How can we decide whether the cost of staying outweighs the cost of moving providers?
Build a 3–5 year NPV model: quantify annual costs of staying (outages, productivity loss, fines probability) versus one‑off migration costs (project, parallel running, exit fees) and medium‑term benefits (fewer incidents, better SLAs).
If moving shows net value and mitigations exist, change is defensible.
What practical steps reduce downtime and protect data integrity during a provider switch?
Use phased migrations with pilots, parallel running and scheduled cutovers outside core hours. Enforce encrypted transfers, checksums, audited staging validation and robust back‑out plans. Runbooks, tabletop exercises and end‑to‑end logging keep migrations reversible and minimise service interruption risks.
Can switching create regulatory gaps, and how do we prove continuity to regulators?
Yes—gaps can appear in audit trails and control ownership.
Prevent this with a documented handover packet: policies, recent tests, migration audit logs, mapped control ownership and evidence that controls remained effective throughout.
Retain copies of historical logs and clearly assigned responsibilities for audits.
What should we look for in a new IT partner to address concerns about switching from our current IT provider?
Prioritise up‑to‑date certifications (ISO 27001:2022) and compliance with Singapore requirements (MAS TRM guidelines, PDPA); insist on third‑party risk processes aligned to MAS expectations, relevant sector experience, a Singapore‑based presence and clear SLAs (MTTR, availability).
Require documented onboarding playbooks, named PMs, pilot offers and demonstrable migration and post‑go‑live support — including local data‑residency and incident‑response capabilities.