How to Select a Bad Partner When Developing Finance Software
What does it take to fail at digital transformation? Learn how knowledge, trust and approaches to problem-solving all form part of an effective digital transformation project.
Software is at the core of modern banking. Retail banks realise they need to be ahead of the curve when it comes to developing and implementing software solutions if they wish to compete with more technologically-savvy FinTechs. Yet some face issues, ranging from a lack of internal resources and expertise to possessing cumbersome business architectures, which can’t be resolved overnight.
The obvious answer to at least one of these is for banks to recruit a partner organisation skilled in software development to help develop their digital offerings. Two-thirds of companies outsource their software development work (source), so knowing what to look for in a good partner is undoubtedly useful. But even more beneficial may be to know what characteristics to avoid when making this crucial decision.
In other words, how do you choose a bad partner when developing finance software?
Select a Partner with No Know-How
In some ways, this is the most important point to address. The kind of complex software development required to truly enhance a bank’s digital offer is not for the faint of heart. This is especially true when considering the different aspects of digitalisation which need to be accounted for, including personalised services and secure payment portals. Partner organisations should therefore have a comprehensive knowledge of the software needs of their client.
Choosing a partner organisation with a very limited skillset is hardly likely to cater for all the different needs of a project. Let’s take an API enabling third-party applications permission-based access to a bank customer’s account as an example. Some points to consider include how to make instant payments processed through third-party apps secure, or how account information can be shared between bank and third-party app safely. The regulatory aspect itself means numerous activities should be performed to ensure regulatory requirements are fulfilled, including the documentation of API functionality in order to certify the solution. That’s not to mention user experience considerations (e.g. how easy is it to initiate these payments from the bank’s end, is account information sharing reliable) which demand their own skills, for instance customer journey mapping and user design.
Planning is one way a partner organisation can obtain such knowledge. Expertise doesn’t just come in the form of knowing how to develop, test, and implement software. Its most important function the ability to be able to plan out an entire development process, from the groundwork needing to be performed with the client (identifying the scope and goals of the project, how the work will be carried out, etc.) to the process of building the software, and testing it against both the original goals set out at the beginning of the project as well as any relevant standards.
Select an Untrustworthy Partner
We’ve already seen how important security is when it comes to software development in finance. Banks deal with billions of complex transactions per day, which – if they were to go wrong – could lead to essential funds going missing or confidential details being illegitimately accessed. Choosing a partner without the right exposure to and awareness of the many security issues which are prevalent in financial services would therefore be an unwise move.
The basis of trust usually comes from the level of communication that exists between a partner organisation and their client. If the partner fails to communicate effectively about the project, not giving the client a full and transparent view of its progress, then issues will likely arise.
Select a Reactive Partner
That’s right – a key sign of a bad partner is how reactive they are. They don’t have a proper plan in place for the entirety of the project, and so they’re never able to bumps in the road ahead. They’re spontaneous, but only once a problem has occurred.
Better partners are able to predict what could go wrong with a project and plan accordingly for any eventuality. They will be proactive rather than reactive and will know how to respond correctly and professionally to complications in a project’s progress. Ideally, they’d be skilled in the Agile methodology, which relies on continuous reappraisals of the project, helping to identify faults early on and to rectify them dynamically.
This is all the more important in the world of finance. Naturally, financial services can be a volatile industry. Whether it’s the ferocious pace with which technological developments are introduced to the industry by FinTechs, or the similar flurry of regulations imposed on financial services providers, it’s clear that a partner needs to be on the ball when developing your software and be able to adapt their way of working when necessary.
Select a Partner Before You’ve Defined the Project
It may seem obvious but choosing a partner without knowing the ins and outs of what the project should cover will mean that you simply won’t get the most out of your partnership. Even a broad idea of what you’re aiming to achieve, whether it’s a new payment portal for customers or a restructuring of your business architecture, is better than searching for and selecting a partner without any idea of the project you want them to work on.
By selecting a partner before defining the scope of the project, you’ll end up with a product which doesn’t specifically suit your needs, coupled with resource and time costs that you probably could have done without. This is especially tricky if you’re working with a partner on a bespoke project, where the proper scoping of a project at a high level of detail is essential if the solution is going to adequately fit your needs.
Selecting a software development partner is one of the most important considerations a financial services company makes. Now you know what not to do, you’ll be able to avoid wasting time and get to work with your partner organisation to build an effective, dynamic software solution.
Check out our Commercial Off-the-Shelf Product vs. Bespoke Guidebook below to find out which type of software solution suits you best.