To Buy or to Build? by Dmytro Karaptan


When a legacy financial institution decides whether to outsource an innovative solution that it needs or to try and develop it in-house, this is a standard decision of whether to build or buy. They first analyze how well custom-made fintech solutions meet their current needs, particularly their pain points. If the solution covers more than 70-80% of their requirements, they may proceed with implementation. Other factors are also considered, but coverage analysis typically comes first.

These factors include:

  • Access to Specialized Skills: Fintech companies specialize in innovative financial technologies and have teams with deep expertise. By opting for a custom-made solution, financial institutions can leverage this specialized knowledge.
  • Reduced Development Costs: Developing a solution in-house can be expensive due to the need for specialized talent, infrastructure, and longer development times. Custom solutions are often more cost-effective as they spread development costs across multiple clients.
  • Faster Deployment: Fintech companies often have pre-existing frameworks and components that can be quickly customized to meet the institution’s needs, significantly reducing the time required to deploy a new solution.
  • Reduced Implementation Risk: Fintech firms have experience delivering similar projects and can navigate potential pitfalls more effectively, reducing the risk of project failure or significant delays.
  • Scalable Solutions: Custom-made fintech solutions are designed to scale with the institution’s needs, allowing for growth without requiring substantial reinvestment in technology.

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