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Essential resources for banking executives:Enter ‘Banking Reinvented’

Accelerated build: bridging the build vs. buy gap

Most banks know they must act now to update their aging infrastructures, but it’s tough to know where to begin. Historically, there have been two main options for platform implementation: building and buying. Rather than remaining within that limiting binary, we introduce accelerated build, a hybrid option that can help financial institutions of all sizes make the biggest impact in the least amount of time.

by Backbase


When selecting the right technology sourcing approach to implement their digital vision, banks face a core dilemma: is it better to buy platform components or to build them in-house?

Well, it’s not an either/or situation. Both building and buying have their own unique pros and cons which make them unsuitable to use as isolated strategies. Instead, consider what we call accelerated build, an approach that gives banks the best of both worlds: a quick time to market and a high degree of customizability. It even helps you cut costs and reduce the risk typically associated with transformation projects.

But before we get into the specifics, let’s explore the build and buy options in order to better understand what accelerated build brings to the table.

Build: pros and cons

Building in-house gives financial institutions full control of the required capabilities and allows them to customize for their exact needs. Banks can create distinct, unique experiences using internal teams who will benefit from the process, developing useful skill sets that serve the bank in the long run. That’s why the build option can be understandably alluring – it allows banks to create innovative, custom-made solutions. It’s easy to stand out from the rest of the market when you’ve created something that is truly unique.

While it is entirely possible to create a new solution from scratch, banks must consider whether they have the resources to make their vision a reality. Building is often cost prohibitive and time-consuming, and few banks have teams that are fully prepared to devote months – or even years – to developing and maintaining these systems. You need to have the right talent and the right ways of working to even consider building your own components. That’s why financial institutions should be cautious about selecting this approach.

Buy: pros and cons

Conversely, the buy option eliminates many of the concerns raised by building, as support and maintenance efforts are significantly reduced, allowing banks to focus on innovation and creating real business value. Banks can select the vendors and services that can solve their pain points, and, in doing so, they can innovate beyond the skillsets they may or may not have in-house by leveraging the resources of best-in-class partners. By bringing external experience to the table, banks often see a faster time to market, as well as a more predictable budget.

However, buying components also has its shortcomings. The most commonly cited drawback of this option is its inability to create deeply customized customer experiences. Detractors often consider bought solutions to be cookie-cutter experiences without the differentiating elements that make banks stand out from the pack. Costs can also be a major limiting factor, and dependency on the vendor can be occasionally restrictive. In-house skill isn’t created, and providers can sometimes lose motivation to help after the completion of the specified deliverables.

Accelerated build: the best of both worlds

It’s clear that neither build nor buy will give your financial institution the best results when used in isolation.

But what if banks didn’t have to make this limiting choice? What if there was an option that took the best aspects of both build and buy, tailored to best suit the individual bank as they undergo their complex, unique digital transformation journey?

Welcome to accelerated build.

Here are the key points of accelerated build, in a nutshell:

  • Get to market quickly by leveraging out-of-the-box assets (adopt)
  • Extend the journeys to make it persona specific (extend)
  • Customize them to differentiate from the competition (accelerated build)

Let’s dive in a little deeper:

First, buy a vendor platform to give yourself a strong foundational backbone and accelerate the first release by leveraging off-the-shelf assets. At this stage, there’s no need to reinvent the wheel. The out-of-the-box journeys will cover the vast majority of your needs and position you for success with a minimum viable product.

Then, when your delivery model grows and you’re learning more about your customers, you can start tailoring these solutions to fit their needs. You can reach the target state by extending the options that are missing from the original provider’s solution. You can even customize the out-of-the-box features to better suit your bank.

At the end of this process, you will have a platform with a fully realized, end-to-end value proposition.

Accelerated build takes the best parts of the build and buy options, creating a hybrid that gives you speed, flexibility, and customizability, all while minimizing risk and cost. That way, your bank can continue doing what it does best: focusing on core domains. You’ll be able to create differentiating, seamless experiences that will delight customers, creating loyal users and generating revenue in the process.

A six-dimensional framework approach

Still wondering where to begin? We’ve developed a framework to help guide your decision-making, which includes:

  • Strategic advantage
  • Criticality to business
  • Partnership capacity
  • Delivery model and capabilities
  • Technology complexity
  • Cost advantage
Build vs buy framework

This framework methodology has several value-added aspects. Most importantly, it will allow you to perform a front-to-back assessment of the best viable implementation option for your financial institution. Additionally, it will help you conduct a white-spot analysis in order to identify the revenue potential that your bank isn’t currently exploiting.

Interested to learn more about how this framework can help your financial institution turn its digital vision into tangible value? Schedule a chat with our value consultants today – they’ll help you take the first step.