Financial institutions struggle to stay ahead of the curve in the rapidly changing world of banking technology, comply with new rules, and uphold strict security protocols. Some businesses continue to embrace in-house platform development in spite of these obstacles.
This begs the question: Is it better to build an internal solution rather than employ a pre-made Core Banking System? This article explores five strong arguments that make adopting a pre-made core banking solution more cost-effective and strategic than going down the costly and time-consuming route of custom development. The advantages of ready-made solutions are set to change how institutions handle technology improvements in core banking. These benefits range from reduced costs and faster time to market to regulatory compliance in the rapidly evolving fintech industry.
Much Faster Time-to-Market
Choosing a ready core banking system over internal development can help you go to market much faster. In the ever-changing Fintech sector, time is of the essence. Using pre-made solutions guarantees that your release won’t become outdated as soon as it hits the market. Because the industry is always changing and requires agility, using pre-built solutions is a smart strategic step to maintain competition. A ready core banking solution makes it possible to launch a system in three months, especially when combined with the ready integrations provided by the SaaS option. This rapid deployment results in increased profitability and saves you years of painstaking development and hiring an inexperienced IT staff.
Core banking software development from scratch is a challenging undertaking that involves many steps, including determining business requirements, formulating technical tasks, coding, developing policies, integrating the system, and creating gateways to other systems. It is quite difficult to find a competent IT team for this particular specialty, and the loss of even one team member can have a negative impact on the project’s timeline and its completion.
Know the Cost in Advance
The ability to effectively arrange your budget and your overall spending are the second and third factors. Selecting a ready-made core banking system has the benefit of upfront pricing, allowing for accurate budget estimates that account for setup and ongoing monthly expenses. This kind of foresight removes the uncertainty surrounding in-house development by enabling you to comprehend the whole costs with clarity. Organizations can circumvent the requirement for an expensive internal IT staff and avoid the high implementation expenses associated with proprietary development. In the latter case, erratic deadlines and timelines frequently result in real costs that surpass the original budget, which breeds uncertainty.
On the other hand, ready-made solutions provide a predictable financial picture, saving businesses from having to deal with unforeseen and skyrocketing expenses. It’s a calculated approach that guarantees cost-effectiveness and releases resources that might otherwise be consumed by the difficulties of putting together and managing an internal technical team. The cost of developing your own solution may be between $1 and $2 million, which is a lot more money than buying a software license or a SaaS option for an already-built core banking solution.
All-inclusive Fundamental Features and Plenty of Customization Choices
Selecting pre-made core banking solutions offers quick access to necessary features without having to wait a long time to construct an internal solution—a process that can take anywhere from one to two years. Choosing a pre-built solution removes any surprises by allowing for early inspection and testing. On the other hand, internal software development is more likely to result in a product that deviates from original plans due to its longer timeline.
Conversely, a lot of pre-made core banking systems are pre-configured with all the features that an organization needs, saving them from having to start from scratch. This ready-to-use feature conserves resources and saves time. Additionally, choosing a ready-made core banking solution gives you a highly customized solution rather than forcing you to “use what you have.” Systems like as Macrobank are prime examples of this adaptability since they offer a range of customization options that allow for customized modifications to satisfy particular business needs or comply with regulatory standards.
No Need to Have a Big Team of Internal IT Staff
Using pre-made core banking solutions reduces the requirement for a sizable internal IT crew for both implementation and continuing maintenance. It streamlines the procedure because a sizable group of seasoned business professionals with experience creating analogous solutions doesn’t need to be found. Finding very qualified experts with knowledge of fintech or core banking software solutions is a difficult task. Additionally, reducing the need for a costly in-house staff reduces the risk of skill and competency loss as a result of personnel turnover. Choosing off-the-shelf solutions offers a practical way to avoid the risks and complications associated with keeping a large in-house IT staff.
Use a Solution That Is Already Reliable for Other Fintechs
The tough process of ensuring compliance with Fintech’s extensive regulatory software standards calls for seasoned personnel who are knowledgeable about core banking technologies. Utilizing the technical know-how of seasoned experts and a core banking solution that has received regulatory approval guarantees a seamless installation procedure free from unforeseen obstacles.
Choosing a solution that is already in use across several financial institutions removes any surprises and indicates that the system is supported and generally recognized by regulatory bodies. Nonetheless, the combined experience and efforts of multiple sector IT professionals yield a solution that complies with regulatory criteria. Purchasing a ready-core banking solution gives you access to software and knowledge that has been gathered over many years by highly skilled professionals.
