Many financial firms begin life inside a much larger parent organisation. Common scenarios include a senior team wanting to enter a new market that falls outside the parent company’s strategy or the need to create a separate business entity to satisfy regulatory requirements.

In the early days, the parent company provides everything: IT, office space, and the comfort blanket of “don’t worry, this is all taken care of”. For a small, newly formed firm, this setup makes perfect sense. It is quick, low-risk, supported by the parent company, and removes a whole set of operational burdens, so it is one less thing to worry about.

The problem is what happens next. As the firm grows and matures, its technology needs evolve, and so do the expectations of its staff. The start-up firm is doing something fundamentally different to the parent, so its requirements rarely fit neatly within the rest of the business. They are treated “like another department”, yet they operate as a totally separate company. Much of what they rely on: trading systems, data platforms, security tooling, and regulatory controls, is entirely different. Suddenly, the relationship with the parent shifts from an enabler to a barrier to growth. And inevitably the question arises:-

Do we need to separate ourselves from our parent company’s IT?

The common trigger events

In our experience working with numerous financial services firms, this question rarely comes out of nowhere. There is almost always a trigger. Sometimes it’s the need to move to a new business-specific technology platform. Other times it follows a cyber incident, or a near miss, where the firm realises that its cyber security needs are fundamentally different and cannot be met by the parent organisation.

Very often, though, the trigger is simply the responsiveness of the service provided to the business users. Big company IT rarely works for small, fast-growing companies: requests move slowly, change is bureaucratic, and the IT experience feels completely out of step with the pace the business needs to operate at.

One of the biggest mistakes we see is framing this decision purely around the immediate trigger:

• “The service is too slow.”
• “We can’t get the tools we need.”
• “We’re worried about security.”

The real question is whether the financial firm can actually scale and manage its risk, with the parent company continuing to provide IT services.

Firms that successfully break away are the ones that recognise this is a business decision first, not just an IT problem. They define what “good” looks like for the next phase of growth, and then design technology and service around that vision.

Those who struggle tend to fix only the pain point in front of them, without articulating the wider business case. That is when projects stall, costs feel harder to justify, and leadership confidence starts to wobble.

This feels too big and too risky

Disentangling from a parent company’s IT can sound daunting. Shared networks, shared systems, shared security tooling, shared contracts. On paper, it looks complex, risky, and expensive.

As a result, many firms delay the decision far longer than they should, even when the current setup is clearly no longer fit for purpose.

What often surprises them is how much has changed in the last few years.

The cloud has made it far simpler to separate cleanly without rebuilding everything from scratch. Because the vast majority of firms rely on cloud-based services for their core operations (email, collaboration tools, file storage systems, etc.), a cloud-to-cloud migration into their own “tenant” is now relatively straightforward.

This is not about a “big bang” cutover. Done properly, the separation is staged, controlled and built around clear milestones with limited disruption to the business.

In short, the perceived risk is usually far higher than the real one.

In our experience, this separation often coincides with an office move. Often, the existing office space and facilities no longer fit the firm’s culture or ways of working. While it can sound like this adds risk and complexity, a new office that aligns with the firm’s future IT setup actually creates an amazing double benefit, particularly for staff joining a business that is visibly modernising, growing and building its own identity.

A sensible next step

If you recognise these challenges in your own organisation, we are always happy to talk it through and share what we’ve learned from helping financial firms navigate this transition safely, cleanly and with minimal disruption.