A decision to make: to build or to buy?
Businesses are faced with choices every day. With every choice they make, some consequences follow. When investing in IT infrastructure, enterprises have two basic options: building or buying.
Banks today face the same predicament: do they build their offerings or solutions from scratch or acquire an existing IT capability from an intelligent software solutions provider?
Deciding whether to build or buy is often complex and nuanced. Each approach has its own set of advantages and disadvantages, and their suitability also depends on the specific needs of banks. What might be an optimal solution for one bank might not make the most sense for another. Ergo, it becomes essential for banks to carefully evaluate and compare the pros and cons of every approach.
What does building mean for banks?
When banks consider the build option, they assume that they would be creating a custom software solution with unique features from scratch. The build approach allows for flexibility, as the bank attains complete control of the entire development process and comes with various functionalities and features. In addition, building something in-house guarantees intellectual property ownership and control. This can provide banks with a competitive advantage over other banks.
However, when banks decide to build rather than buy their solutions, they have to understand that it is not without its challenges.
i) Development and Time Constraints: Building an offering requires significant time, effort, and resources. It involves designing the architecture, developing the software, and ensuring scalability, security, and performance. This process can be time-consuming, potentially delaying the launch and impacting the overall time-to-market.
ii) Technical Expertise: Building something from scratch requires a diverse set of technical skills, including software development, system architecture, database management, user interface design, and more. Acquiring or assembling a team with the necessary expertise can be challenging, especially if you need more resources or have limited access to experienced professionals and team managers
iii) Maintenance and Updates: Developing the offering is just the initial step. Ongoing maintenance, bug fixes, updates, and feature enhancements are necessary to keep it relevant and competitive. This requires a dedicated team, resources, and a long-term commitment to support and improve it.
When banks choose to buy a product-based solution
On the other hand, the buy option involves acquiring a software solution that is already available and customised from a vendor or third party. This approach offers several benefits, including reduced development time and immediate access to a functioning product. Solution providers often provide ongoing support, regular updates, and maintenance, relieving the organisation from the burden of managing these tasks internally. Additionally, buying product-based solutions can be more cost-effective, especially for standard or widely used functionalities. It is essential to thoroughly assess the compatibility of the purchased solution with existing systems and ensure it meets the organisation’s specific requirements.
Ultimately, the decision to build or buy a software solution requires a comprehensive analysis of the unique circumstances and needs of the banks. It involves carefully considering the benefits and drawbacks associated with each approach, weighing factors such as customisation requirements, development timelines, ongoing maintenance costs, intellectual property considerations, compatibility, and vendor reliability. By conducting a thorough evaluation, organisations can make an informed choice that aligns with their long-term objectives and optimises their software solution.
While it’s up to the banks to make the final decision, whether to build a solution or buy one, the reality remains that standalone products are much more helpful as they are tailored to tackle specific problems
Advantages of choosing to buy over building:
1. Time and Speed to Market: Purchasing from a product-based solution provider lets you quickly enter the market and start offering your customers what they want. The development and testing phases are already completed or are being undertaken by experts, saving you valuable time and resources.
2. Reduced Development Costs: Building something requires a significant investment in development resources, infrastructure, and ongoing maintenance. By buying a solution from vendors who have a working knowledge of specific industries can mean several things. One is that you will be getting a product from an industry-expert. Second is that you will be saving huge sums on development and maintenance. Letting you allocate your resources to other business areas.
3. Expertise and Support: Purchasing a solution usually comes with access to a team of experts who have developed and maintained it. They can provide you with ongoing technical support, training, and assistance, which can be invaluable, especially if you need more expertise. This can help you overcome technical challenges and ensure the smooth operation of the platform.
Buying the right product for you
When considering whether to buy the right product-based banking solution or build it, it’s important to assess several factors. Buying a product can be advantageous due to time and cost considerations, as building anything from scratch requires significant resources. Purchasing a product that aligns closely with your needs can save you time and effort.
Clayfin provides innovative digital banking solutions tailored to your bank’s needs. From hyper-personalised retail banking solutions to intuitive Personal Finance Management solutions, Clayfin understands your customers’ needs, ensures scalability for your business, and elevates customer satisfaction for users.
Looking to buy a dynamic digital banking solution to expedite your bank’s growth? Reach out to our experts today!