Traditional financial services companies are now investing tons of money into developing their own software. But should wealth management firms be following along on this trend?
To keep up with the rapidly changing FinTech landscape, wealth management firms know they have to be technology-enabled and innovative. In a recent study commissioned by Univeris, almost a third of wealth management firms (29%) opt to invest money in an attempt to build these technology features themselves. However, this may not be the best option – and here are some problem with building own software.
Some things are better off taken care of in-house, while some are not. Consider company resources—time, money, and human capital, as well as the support systems necessary to carry out a major technology project. Furthermore, consider that the allocation of these resources and support systems to building a company’s own software will take away from the resourcing of other company priorities and business demands.
The complexity of building software in terms of cost and time is often underestimated, especially if these types of projects are new to the business. When building own software, there is always a risk that the initiative will take much longer than anticipated and could end up costing much more to the business in the long run.
Not Just a One-Time Cost
Developing software is not just about the build, testing, and implementation—software doesn’t work that way. Software needs constant upgrades and patches, continuous testing and QA, added features and capabilities, and ongoing development and enhancements. Developing software is a long-term commitment than spans well past the build. If this is not a core capability, it may be better off left to the experts.
Innovate Faster with a Strategic Partner
Building software is not an easy feat. Working together with, or buying from, a strategic partner that is an expert in FinTech software will allow wealth management firms to innovate faster, minimize project risks, and focus on their core business.
Univeris has over 20 years of experience in building wealth management technology. Univeris partners with clients to build software together and offers off-the-shelf products, including Robo-Advisor, Goal-Based Investing, WealthTech APIs & RegTech APIs.