Author : BACKBASE

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Innovate at the Speed of Digital: Making the Best “Buy Plus Build” Decision for Your Bank

In today’s fast-paced digital landscape, the banking industry is undergoing a massive transformation. To stay competitive, banks must embrace innovation and modernize their technology infrastructure. But with so many options, how do you make the right decisions? Let’s explore the optimal approach to tech modernization: the “buy plus build” strategy.

Introduction

Let’s get the obvious out of the way — you already know that neither buying from vendors nor building from scratch works as a complete strategy for your bank’s tech modernization. In a vacuum, these options for creating platform components have enough drawbacks to make them unfeasible, including everything from sky-high budgets to cookie-cutter solutions. So it stands to reason that the best approach is a combination of the two, uniting the best of both worlds while cutting out the rest.

The “Buy Plus Build” Approach: A Strategic Overview

The “buy plus build” strategy is a hybrid approach that combines the benefits of both purchasing pre-built solutions from vendors and developing custom solutions in-house. This allows you to:

• Leverage pre-built solutions for common functionalities, reducing development time and costs.
• Focus internal resources on building custom solutions that differentiate your bank and meet unique customer needs.
• Achieve faster time-to-market for new products and services.
• Maintain flexibility and control over your technology roadmap.

Key Factors to Consider

Implementing a successful “buy plus build” strategy requires careful consideration of several key factors:

• Strategic Alignment: Ensure that your “buy plus build” strategy aligns with your overall business goals and digital transformation strategy.
• Vendor Selection: Carefully evaluate potential vendors based on their experience, technology, and ability to integrate with your existing systems.
• In-House Expertise: Build a skilled in-house team capable of developing and integrating custom solutions.
• Integration: Focus on seamless integration between purchased and custom-built components. APIs and open standards are your friends.
• Scalability and Flexibility: Choose solutions that can scale to meet future demands and adapt to evolving customer needs.
• Budget and Resources: Develop a realistic budget and allocate resources effectively between buying and building.
• Security: Prioritize security throughout the process, from vendor selection to custom development.

Tips for Successful Implementation

Follow these tips to maximize the benefits of your “buy plus build” strategy:

• Prioritize Core Capabilities: Identify the core capabilities that are critical to your bank’s success and focus your custom development efforts on these areas.
• Embrace Agile Methodologies: Use agile development methodologies to ensure flexibility, speed, and responsiveness.
• Foster Collaboration: Encourage collaboration between your in-house teams and vendor partners.
• Establish Clear Governance: Implement clear governance processes to manage the “buy plus build” approach.
• Monitor and Optimize: Continuously monitor your progress and make adjustments as needed.

Conclusion

The “buy plus build” strategy is the key to unlocking digital innovation and staying ahead in the competitive banking landscape. By carefully considering the factors and following the tips outlined in this guide, you can create a future-ready bank. You can combine the best of both worlds, driving efficiency, and delivering exceptional customer experiences. Embrace this approach and watch your bank thrive in the digital age.

Frequently Asked Questions (FAQ)

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