Firms today often face a critical question – should they build custom solutions in-house or invest in proven, pre-built ones from trusted vendors? This build vs buy analysis is particularly relevant for wealth management firms, where operational efficiency, client satisfaction, and compliance are paramount. While building a custom solution may offer greater control and flexibility, buying a proven, pre-built solution often delivers faster results with less risk.
understanding the build vs buy analysis in wealth management
The build vs buy analysis involves evaluating whether a business should invest in custom development or purchase an existing solution that meets its operational and strategic goals. In wealth management, this decision impacts everything, from back-office operations to client-facing tools and enabling technologies. The appeal of building lies in achieving full control and tailored features. However, purchasing a pre-built solution often offers substantial benefits, from cost savings to faster deployment.
Wealth management firms face constant pressure to meet evolving client demands, comply with regulations, and stay competitive. The wealth management investment process requires robust, compliant, and scalable solutions. So, the build vs buy decision must account for long-term efficiency, compliance, and speed – factors that significantly impact a firm’s success.
- speed to market: the need for agility
- cost-effectiveness: avoid hidden costs
- expertise and support: access to specialists
- compliance and security: minimising risks
- scalability: ready for growth
- internal resources: focus on core competencies
Speed is a critical factor in wealth management. The ability to quickly deploy new tools and technologies allows firms to stay competitive. Building a custom solution takes time – months, or even years – during which market conditions and client expectations may shift. In contrast, buying a pre-built solution allows firms to get up and running almost immediately.
A build vs. buy analysis reveals that pre-built solutions are quicker to deploy. They reduce time-to-market and allow firms to focus on growth and client service rather than system development.
Custom-built solutions often come with significant, hidden costs. Software development, testing, maintenance, compliance updates, and ongoing troubleshooting can quickly add up, making in-house builds far more expensive over time.
Buying a solution, however, typically involves transparent and predictable costs. Firms know exactly what they are paying for, which allows for better financial planning and resource allocation. Purchasing a solution enables wealth management firms to avoid the hidden expenses associated with in-house development and invest their resources more effectively.
Building a custom solution requires deep domain expertise – not just in software development, but also in the nuances of the wealth management industry. Even the best in-house teams may lack the specialised knowledge needed to create a system that meets regulatory, security, and operational requirements.
By purchasing a solution, firms gain access to the expertise of vendors with expertise in wealth management investment and technology. These providers continuously refine their products to reflect changing industry standards. Additionally, they also offer ongoing support, updates, and troubleshooting. This access to vendor expertise and reliable post-deployment support is a major advantage of purchasing solutions.
Wealth management firms operate in a highly regulated environment, where compliance is non-negotiable. Custom-built systems require constant monitoring and updates to remain compliant with changing regulations, which can be both time-consuming and expensive.
On the other hand, pre-built solutions often have compliance and data security at their core. Reputable vendors ensure their products meet the latest regulatory standards, helping wealth management firms minimise the risk of non-compliance. By opting to buy rather than build, firms can focus on their core business while relying on vendor-led updates to keep systems secure and compliant.
As firms grow, so do their technology needs. A custom-built solution may meet current needs but could struggle to scale as the business grows. Pre-built solutions, on the other hand, offer scalability, which allows firms to easily handle more data, clients, and transactions.
Scalability is essential in wealth management, where firms may need to accommodate a larger client base or offer new services. Purchasing a solution helps firms stay prepared for growth, without the need for costly redevelopment of an in-house system.
Wealth management firms succeed by focusing on what they do best: helping clients manage their investments and achieve financial security. Building custom solutions takes significant time and effort from internal teams. This can divert their focus away from high-priority tasks.
By choosing to buy, firms can free up internal resources and reallocate them to focus on client service and business growth. A build vs buy analysis often shows that purchasing technology allows organisations to operate more efficiently while empowering teams to focus on high-value activities that drive business performance.
conclusion
When choosing between buy vs build for wealth management solutions, buying offers wealth management firms clear advantages – faster deployment, cost savings, access to specialised expertise, and built-in compliance. Pre-built solutions also offer scalability while allowing internal resources to focus on core business competencies.
For wealth management firms looking to optimise operations, reduce risks, and stay competitive, buying a pre-built solution is often the smarter choice. Infosys BPM offers comprehensive wealth management solutions that drive efficiency, ensure compliance, and support growth, without the complexities of building from scratch.
