How Much Does It Cost to Hire an MSP for Financial Institutions?
The truth is, whether you opt for in-house IT personnel or outsource to a third-party service provider, maintaining an efficient IT infrastructure requires a significant investment.
For businesses in the finance industry, it could even be more costly. The finance sector is governed by stringent regulations requiring multi-layered data security and rapid response to emerging threats. These demands pile on the costs, making it crucial to evaluate IT needs carefully and budget accordingly.
If you are reading this, you are likely considering hiring a managed IT service provider (MSP). That’s why, in this article, we’ll try to answer a critical question: How much does hiring an MSP for financial institutions really cost?
As an experienced MSP serving various industries, including finance, Intelligent Technical Solutions (ITS) has always been committed to providing transparent answers to our clients’ tough questions – including cost-related ones. We understand that clarity on IT expenses is non-negotiable for financial institutions.
In this article, we’ll answer these specific questions so you can understand how much managed IT costs:
- What are the factors that affect managed IT pricing?
- What is the total cost of managed IT?
What are the factors that affect managed IT pricing?
As much as we want to provide you with a clear-cut answer, you can only get the exact figure by understanding the factors that contribute to the cost:
1. Service time required
MSPs often structure their pricing models based on various factors, including the level of support needed and the duration of engagement.
Suppose a finance firm anticipates requiring continuous, round-the-clock support. In that case, they may opt for a retainer-based agreement, which can result in a higher monthly or annual cost but often offers cost predictability. On the other hand, if the support needs are sporadic or project-specific, the pricing may be more variable, with hourly rates or per-incident charges.
To figure out how much time you will need support from your managed IT service provider (MSP), answer the following questions:
- How big is your IT network (number of users, workstations, servers)?
- Do you need proactive maintenance and support?
- Do you need to have after-hours and weekend support?
- Is your business’ IT system running around the clock?
- Do your usual IT problems take a long time to fix?
- Do you have recurring IT issues, or are they usually a one-time problem?
The price range for service time:
Service time can be billed hourly or be a recurring cost. You're most likely on an hourly rate if you’ve hired a break-fix company instead of an MSP. The price ranges from $150 to $250 per hour but can go up or down depending on the company you’ve hired.
Managed IT service providers will include service time in your plan with them. Plans can range from $50 to $150 per user per month, with other fees depending on your IT infrastructure needs.
Make sure you check how much time your MSP allocates for service in your plan and evaluate if that is enough for your needs.
2. Number of users
In the finance sector, where data security and compliance are critical, a larger user base often means a more extensive network, stricter compliance requirements, and potentially more advanced technology needs.
As a result, a company with more users may end up paying more for MSP services as they require more comprehensive support to ensure the security, reliability, and efficiency of their financial operations.
On the other hand, larger user bases might benefit from cost savings due to economies of scale, potentially leading to volume discounts or more favorable pricing arrangements.
The price range for each user:
The price range for each user depends on what you need. Whether you’re considering implementing a Voice over Internet Protocol (VoIP) system, upgrading your workstations, opting for a business internet installation, or incorporating mobile device management, these factors will determine the final cost.
Prepare at least $50 to $300 per user. Coordinate with your MSP if your fees are one-time payments or if they’ll recur each month for transparency.
3. Number of servers
Generally, a larger number of servers implies a more complex and resource-intensive IT infrastructure, which typically requires more extensive management and support from the MSP.
This increased complexity can result in higher costs, as the MSP may need to allocate more human resources, deploy advanced monitoring and security tools, and provide more comprehensive backup and disaster recovery solutions to ensure the stability and security of the financial institution’s IT environment.
The price range for a server:
You can expect to spend as low as $5,000 to over $20,000 to set up everything you need for one server. The server cost can go up or down depending on the type of equipment you choose to invest in.
MSPs usually provide a much lower upfront price for servers, with the pay-off of having a monthly fee for the time that you use the server. For example, at ITS, our cloud servers start at $185 per month, while a Backup and Data Recovery (BDR) server will start at $200 per month. Other MSPs will also have prices ranging between $200 and $500.
4. Amount of data
Finance firms deal with vast amounts of sensitive data, including customer records, financial transactions, and regulatory compliance data. Storing and managing this data securely and efficiently is critical to their operations.
MSPs charge based on various factors, including the volume of data they manage, as it affects the required infrastructure, storage solutions, and ongoing maintenance efforts.
A larger data footprint typically results in higher costs in terms of initial setup and ongoing operational expenses, as it demands more robust infrastructure and security measures to ensure data integrity and compliance with industry regulations.
The price range for data storage:
The price for storing your business data widely varies. Expect to spend anywhere between $5 per month (for directly bought cloud storage with no maintenance) and $500 (for maintained data storage with backups). Your bill also depends on the company you’re coordinating with.
5. Evolving needs
As financial firms adapt to changing regulatory requirements, technological advancements, and security threats, the demand for specialized MSP services such as cybersecurity, compliance management, and data analytics may increase.
This heightened demand can lead to higher pricing for MSPs that offer expertise in these areas, especially if there is a limited pool of qualified providers.
Additionally, as financial businesses expand or scale down their operations, their MSP requirements may fluctuate, impacting the pricing structure based on the scope and complexity of services needed.
The price range for evolving needs:
Expect costs to be anywhere between $50 and $1,000 per month. The numbers will depend on the size of your company and the services you need but may increase for more users or specialized needs.
What is the total cost of managed IT?
Managed IT typically costs $150 to $300/user per month, depending on the previous price factors. Most starting companies with around 20 users pay $3,000/month.
But, due to the heavy cybersecurity needs of the finance industry, expect your pricing to fall around the upper $200 to $300 price range.
Aside from the per-user price, you’ll also need to consider possible onboarding fees. Onboarding is the process of an MSP collecting your user and IT data. This is important in integrating your company into an MSP’s support center.
Ready to Invest in Managed IT?
Before requesting price quotes, assess the abovementioned factors and identify the specific support requirements for your finance business. While it’s true that various companies present varying price brackets, analyzing these aspects will help you estimate your IT budget.
At ITS, we help hundreds of businesses understand and leverage their technology to achieve their goals. Schedule a meeting with us to learn how we can start your managed IT journey.
But if you need more time to decide, the following content might help you with your research:
- Is a Managed Service Provider (MSP) Worth the Cost?
- The Ultimate Guide to Managed IT for Financial Institutions
- ITS Pricing: How Much Do We Cost?