RegTech has transformed how institutions approach their regulatory responsibilities. By reducing manual tasks, cutting costs, and sometimes enhancing customer experience, RegTech is increasingly becoming an integral tool in various industries.
The ever-growing complexity of the regulatory landscape, coupled with stringent enforcement, has made the adoption of RegTech solutions more than just a trend—it’s becoming a necessity. However, this raises a crucial question for institutions capable of developing in-house solutions: should they build or buy?
Taina Technology CEO Maria Scott recently delved into the seven key considerations that institutions face in this build vs. buy debate.
1. Speed of Compliance Achievement: Meeting regulatory deadlines is critical. Institutions must weigh the timeline of developing an in-house solution against the speed of purchasing and implementing an off-the-shelf product to ensure timely compliance.
2. Ongoing Compliance Maintenance: When evaluating vendors, it’s essential to assess their commitment to maintaining compliance and updating their platforms as regulations change. Similarly, institutions considering in-house development need to evaluate their ability to dedicate ongoing resources to maintain and update their solutions.
3. Cost Analysis – Initial and Recurring: Organizations must balance the initial and ongoing costs of purchasing and updating a RegTech solution against the expenses associated with building and maintaining an in-house system. This includes evaluating how the solution integrates with and impacts existing workflows. Often, the return on investment is linked to the level of automation provided and the potential reduction in manual work.
4. Impact on Customer Experience: RegTech solutions can significantly affect customer experience. Institutions must consider whether a vendor can integrate seamlessly with their existing customer experience strategies or if an in-house solution is necessary to maintain control over the customer interface.
5. Competitive Advantage: Institutions should consider if having a unique, in-house solution provides a competitive edge not available to their rivals.
6. Adaptability to Existing Processes: It’s crucial to assess how well a vendor’s solution can integrate with and adapt to an institution’s current processes.
7. Risks of Scope Creep and Unexpected Costs: Institutions must be wary of the risks associated with scope creep and unforeseen service costs, which can substantially inflate the budget, especially with external vendors.
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