To buy or not to buy?
While working within financial services it is amazingly easy to spot two radical and different approaches taken for IT development. Established banks tend to build and develop in-house solutions with in-house development teams, as Fintechs tend to buy off-the-shelf solutions and rely heavily on external vendors. One may ask: what is the right thing to do?
At Gooliver we believe the default mantra for any financial service organisation should be “buy unless you have good data to prove otherwise”. Established banks have a lot to discover by building less and buying more. Fintechs could benefit by making their vendor selection and management practices stronger. At the end of the day, all financial service providers will have to master both building technology and buying technology in the market. Here are some real-life best practices of “buying and building” we experienced recently.
When buying externally: 1. Know the best technology and solutions available in the market; 2. Talk to key vendors and their customers regularly, even if you do not plan to buy; 3. Quantify and conduct cost–benefit analysis when selecting vendors; 4. Be ready to cover the limitations of solutions provided by external vendors.
When building in-house: 1. Avoid building anything that already exists in the market; 2. Involve and co-create with actual end-users from day one; 3. Deploy 100% dedicated cross-functional development teams; 4. Ensure incremental development with short learning cycles; 5. Do not stop development (and funding!) once solutions are operational.
Many financial service providers have mastered at least few listed items. We are still searching for a single one that would be great at all of the above.
Maybe you know one? We are curious to learn.