Finding the Right Balance of Control Part II: The Middle Ground

Man_Suit Tailor SM

Editor's Note: In Part Two of finding the right balance of control blog series, we discuss the option of implementing a customizable solution and how to benefit from customization through configuration. 

In part one of this blog series last week, we discussed the pros and cons of building systems in-house or buying solutions off the shelf.  Building in-house gives you complete control over the final outcome - from the solutions architecture to the features and functions - and ensures your priorities are met. However, this requires a large team of IT engineers and staff to develop and maintain software solutions over the life of the system. 

Banks and credit unions can truly benefit from the middle ground, which is implementing a solution that is already built but is customizable and configurable to meet all their unique needs and requirements. 

The Middle Ground - Benefits of Customization Through Configuration

Traditionally, buying a solution off the shelf has been shunned due to the lack of control it offers.  However, there have been developments over the last 10 years that have materially changed the potential of the buy option. The use of modern, proven development methodologies and tools (e.g., APIs, microservices, software development kits) are tipping the scales in favor of the buy option for more and more financial institutions.  These factors are creating more configurable solutions that support faster time to market giving most institutions the ability to deliver new innovations faster and more often packaged within their own distinct look, feel and user experience.

To refresh your memory on the suit analogy from last week, we compared buying a solution off the shelf to buying a suit off the rack at a department store—there is little to no room for alteration. Building a solution from scratch is like starting with fabric and sewing a suit—extremely customized, but expensive and time-consuming. And the third option, customization through configuration, is comparable to having a suit tailored. It’s more cost-effective than starting from scratch, but you can still get most of the customization you crave.

These technical advances are coming at a time when the role of digital banking and the platforms/solutions required to support its evolution are becoming critical to a bank’s or credit union’s ability to compete for and win new customers and members. Increasingly financial institutions that once felt they had to build solutions in order to maximize their control are leaning toward vendor-built solutions that employ the new methodologies and tools mentioned above to allow the institutions to control their own destiny. 

Banks and credit unions rely heavily on technology to operate today, but delivering the right solutions in a timely and cost-effective manner can be a challenge. Resources are limited, talent is hard to find, and at the same time, technology continues to evolve and change at an accelerating pace that tops anything seen before in our industry.  Utilizing a solution from a vendor that is built with modern technology offers configurability, scalability, and extensibility. It can decrease costs and reduce complexity in an institution's IT infrastructure while, at the same time, delivering the benefits and differentiation needed to be competitive.  

While it is true that there was a time when choosing a third-party solution meant giving up the control an institution needs to lift its brand above the competition's, technology advances have erased these limitations. Vendors that have taken advantage of these advances are now delivering banks and credit unions solutions that allow them to decide how to win the battle for consumers.