Opting for Ready-Made: 5 Convincing Reasons to Choose Core Banking Solutions Instead of In-House Development
In the ever-evolving landscape of modern banking technology, financial institutions grapple with the need to innovate, adhere to emerging regulations, and maintain robust security standards. Despite these challenges, some companies persist in favoring in-house platform development. This raises the question: is developing an in-house solution more advantageous than opting for a ready-made Core Banking System? This article delves into five compelling reasons, shedding light on why embracing a ready-made core banking solution is a strategic and efficient choice over the expensive and time-intensive path of proprietary development. From expedited time-to-market and cost reduction to regulatory compliance in the dynamic fintech industry, the benefits of ready-made solutions are poised to reshape how institutions approach technological advancements in core banking.
1. Much Faster Time-to-Market:
Opting for a ready-made core banking solution, rather than in-house development, can significantly accelerate your time-to-market. Speed is paramount in the dynamic Fintech industry, and relying on ready-made solutions ensures that your release remains relevant, avoiding obsolescence upon market entry. The industry’s continuous evolution demands agility, making the embrace of pre-built solutions a strategic move for sustained competitiveness. Launching a system within three months becomes a viable reality with a ready core banking solution, especially with the ready integrations offered by the SaaS option. This swift deployment translates to quicker profitability, sparing you the need to invest years in meticulous development and the search for an experienced IT team.
Developing core banking software from scratch is a complex task involving various stages, such as identifying business needs, crafting technical tasks, coding, policy development, system integration, and establishing gateways to external systems. Securing a skilled IT team for this niche is exceedingly challenging, and the departure of even a single team member can adversely affect the timeline and successful execution of the project.
2. Save Your Money and Know the Price Beforehand:
The second factor revolves around overall expenses and the capacity to plan your budget effectively. Choosing a ready-made core banking solution brings the advantage of knowing the price beforehand, enabling reliable budget forecasts that encompass both setup fees and monthly costs. This foresight allows you to clearly understand the final expenses, eliminating the uncertainties associated with in-house development. Institutions can avoid high implementation costs in proprietary development by bypassing the need for an expensive in-house IT team. Fluctuating schedules and deadlines in the latter scenario often lead to actual expenses exceeding the initial budget, creating unpredictability. In contrast, ready-made solutions offer a stable financial outlook, sparing organizations from navigating unexpected and soaring costs. It’s a strategic move that ensures cost-effectiveness and frees up resources otherwise absorbed by the complexities of assembling and maintaining an in-house technical team. Developing your own solution may incur costs ranging from 1 to 2 million, a significantly higher investment than opting for a ready-made core banking solution’s SaaS option or a software license.
3. Inclusive Core Functionalities and Abundant Customization Options:
Choosing ready-made core banking solutions provides swift access to essential functionalities without the prolonged wait of developing an in-house solution, a process that can take one to two years. Opting for a pre-built solution enables upfront scrutiny and testing, eliminating potential surprises. In contrast, internal software development, with its extended timeframe, carries the risk of delivering a product that diverges from initial expectations.
On the flip side, many ready-made core banking systems come equipped with all necessary functionalities, saving organizations from reinventing the wheel. This ready-to-use functionality not only saves time but also conserves resources. Furthermore, opting for a ready-made core banking solution doesn’t mean settling for a “use what you have” approach; instead, it offers a highly customizable solution. Systems like Macrobank exemplify this flexibility by providing access to various customizations, enabling tailored adjustments to meet specific business requirements or adhere to regulatory mandates.
4. No Need for a Vast Internal IT Team:
Embracing ready-made core banking solutions eliminates the need for a large internal IT team during implementation and ongoing support. It simplifies the process since there is no need to find a large team of experienced industry experts well-versed in developing comparable solutions. Locating highly skilled professionals with experience in core banking or fintech software solutions is a formidable challenge. Furthermore, avoiding reliance on an expensive in-house team mitigates the risks associated with potential skill and competency loss due to employee departures. Opting for ready-made solutions provides a pragmatic solution to the complexities and uncertainties of maintaining an extensive internal IT team.
5. Gain the Expertise of a Highly Professional Team and Adopt a Solution Already Trusted by Other Fintechs:
Ensuring compliance with Fintech’s intricate regulatory software requirements is a complex task that demands seasoned professionals well-versed in core banking solutions. Leveraging the technical proficiency of established professionals and a regulator-approved ready core banking solution ensures a smooth implementation process without unexpected hurdles.
Opting for an already operational solution in different financial institutions eliminates surprises, signifying a system endorsed and widely accepted by regulatory authorities. However, a solution aligned with regulatory requirements results from numerous industry IT professionals’ collective experience and efforts. Acquiring a ready-core banking solution provides software and expertise accumulated over many years by highly qualified specialists.
