The Challenges of In-house Tools and Regulatory Demands in Payments

In-house tools and the increasing regulatory demands create significant challenges for businesses. Only a small percentage of firms (5 to 9%) still rely on these tools, and many face limitations due to their inability to adapt to changing regulations. One major issue is that in-house systems are often rigid, requiring development input for every regulatory change. This constant need for updates can lead to a slow and costly process, especially when regulations demand daily controls and clear audit trails.

When deciding between building and buying a solution, businesses must consider whether they are building to meet specific customer needs or simply developing a generic system. Often, purchasing technology from external providers is a more efficient solution. By buying into a system already developed and tested, businesses can benefit from the investments of others. This approach is especially useful for core functions like payments, where custom development may not provide a competitive advantage. It also allows businesses to focus on leveraging external expertise while reducing the burden of continuous updates and maintenance.

For payments specifically, the decision to buy often makes more sense, as it is difficult for businesses to outperform existing solutions provided by industry leaders. Companies like Kani have successfully partnered with others to modernize their core payment platforms, ensuring scalability, reliability, and ease of integration. Instead of building new technology from scratch, leveraging existing solutions reduces risk and cost, allowing companies to deliver faster, more efficient services to their customers.

In conclusion, while in-house tools can provide control, they often come with significant maintenance and update challenges. The alternative of buying technology from external vendors offers flexibility, scalability, and cost efficiency, especially in an industry like payments, where regulatory requirements and technological advancements evolve rapidly.