Among the public, there’s an increasing interest in self-creation. From home cooks breaking away from the prepackaged, preservative packed meals of yesteryear, to hobbyists building their own furniture from scratch, people are seeing the value of self-creation.
But on the software side of things, people are relying less than ever on code built from the ground up, favouring templates and plug-and-play solutions. With the amount of great, universal software options out there, it can be a case of “re-inventing the wheel” to develop your own.
This is often a dilemma for financial institutions. When pursuing software for banks, you have to ask yourself: “Should we just do this ourselves? Or pay an outside team?” There are multiple factors to consider that could tip the scale one way or the other.
To solve the riddle of “build it or buy it” as it pertains to software for banks, here’s what you’re going to want to know:
Do You Need it Fast?
Let’s say you want tomato soup. You could shop for the ingredients, cook them, process them, serve it, and do the dishes when you’re done. Congratulations — you’ve spent the better part of an afternoon on soup. Now where’s that grilled cheese?
An alternative is a can of Campbell’s. This nostalgic staple is ready after a quick stir on the stovetop, giving you plenty of time to work on the grilled cheese in the meantime — and they pair so well don’t they?
This analogy applies exceptionally well when discussing software for banks. The time it takes to develop software in house can be inordinately long, especially with the red tape and other projects to consider. If you’re hungry for digital transformation (or soup for that matter) buying a premade solution is without a doubt the faster approach.
Do You Need it Secure?
When you’re talking about software that handles financial data, you’re talking about software that needs to be as secure as humanly possible. In the “build it or buy it” debate, build it tends to tick the security box, because there’s a belief that in-house software will be more secure than third party solutions.
This may have been true in the early days of cloud and software-as-a-service (SaaS). But times have changed. With private and hybrid cloud solutions an option, financial institutions have more control over the flow of data than ever before.
Plus, with advancements in encryption, this data is harder to access by illicit parties too. When it comes to security, building it or buying it both offer impeccable solutions for banks shopping for software.
Do You Need it to be Cost-effective?
This one’s easy. Assuming you have an unlimited budget and no oversight about how you spend it, by all means choose for yourself. But if you haven’t found the lost treasure of El Dorado, buying a premade solution is the less-expensive option.
It’s simple economics, really. Building software for banks from the ground up is an arduous, resource-intensive undertaking, even for the FinTechs that do it outside the bank. But once it’s built, it can be tweaked to meet the unique needs of the financial institution that needs it for a relatively low cost.
Banks that are concerned about the cost of implementing transformative solutions best avoid building in-house like the plague. Here, buying it from a third party is the obvious solution.
Do You Want it Better?
Banks are really good at, well, banking. And they can build some pretty decent technology too (within the limits of their legacy systems, of course.) But just like you wouldn’t expect a software company to start providing financial solutions (unless you’re Amazon, maybe) banks should stick to what they do best.
That’s why third party FinTech companies are more frequently partnering with banks. The solutions they offered are built by teams dedicated to nothing else but the successful design and deployment of financial software.
Banks don’t need to reinvent the wheel, they can simply work with FinTechs to have the very best software available and dedicate their resources to more relevant projects.
“Buy it” is Usually Best When Pursuing Software for Banks
If you’re going to invest in software for banks, it’s almost always the case where buying it from a third party makes more sense than building it yourself. It’s faster to deploy, more cost effective, better built, and just as secure.
Interested in learning more? Don’t hesitate — reach out to us today and chat about how our software can help your bank.
Zafin (@zafin) is a leading financial technology provider that enables banks to form richer, more personalized client relationships. Built from the ground up for financial services, its platform empowers banks to enhance revenue and operational efficiency. Founded in 2002, Zafin sits among North America’s top FinTech companies, and is trusted by retail and corporate units at some of the largest banks worldwide. Headquartered in Toronto with global offices, Zafin has a proven track record with a 100 percent client retention rate as validation.
Cam is the Digital Communications and Marketing Coordinator at Zafin. With a background in journalism and a passion for blogging, Cam strives to tell compelling digital stories. At Zafin he will share the latest trends and news in the FinTech world, and share Zafin’s role as leader in the industry. Follow him on Twitter @CamSmoth