Compliance solutions for customer lifecycle management – Build or Buy?

We think it's madness to consider building your own compliance solution for customer lifecycle management. But then we would, right? Here are some good reasons we know buying is a better option.

Posted by: 
Oliver Malmed
Jul 20, 2020

OK, as PassFort is a SaaS solution used by financial services firms to manage compliance and financial crime across their customer lifecycle processes I would advocate you buy our solution rather than trying to build our own.

But there are good reasons for this beyond loving our software and having customers that love it too.

From onboarding to offboarding to ongoing risk monitoring, PassFort is dedicated to automating risk and compliance activity. And knowing that automation will only ever get you so far with a truly robust approach to compliance, we are also focussed on making manual work easier and more efficient for the teams managing these processes.

Development resource

The PassFort platform has been developed over 5 years with some of the most talented programmers and full stack developers in the market. No doubt firms have their own awesome internal IT resource, but compliance is complex and it changes all the time, which can be easy to underestimate.

Employing a developer and dedicating their expertise to the field of compliance would be a significant investment in time and expense. You might ask - could we carve out time from an existing developer’s schedule, rather than putting someone on it full time? I refer back to how complex compliance can be and here are some other things to consider…

Ongoing time and expense

It might be tempting to think building a compliance solution would be a one-off, upfront investment but once it’s done, it’s done. Then you will have your own bespoke compliance solution that you can be in control of and adapt as and when you want.

Actually flexibility in compliance software can be an issue with large enterprise solutions. It’s not for PassFort – in fact we encourage clients to change their configuration and pride ourselves on how easy it is to adapt compliance workflows in our no-code policy builder. And this is achieved at no additional cost.

Working in FinTech and compliance, we know it’s never a case of a solution being 'done' - and it shouldn’t be!

For us change creates opportunity. For someone building and operating an in-house solution, change becomes a pain and it comes with ongoing time and cost requirements.

  • Your technology will become outdated;
  • The IT resource will be pulled in different directions;
  • The person who built the solution will be a single point of failure and what if they move on?
  • A compliance workflow you designed will need to change because a new piece of regulation is introduced
  • Your company decides to expand into a new market with different regulations
  • You launch a new product and have to design a new compliance policy

The list goes on.

It’s our pleasure to deal with this, is it yours?

Beyond maintenance is efficiency

There are limitless reasons why a compliance platform will need to change and what it doesn’t account for are areas you want to change.

We always work with clients to identify areas of further saving and efficiency. This is done through a quarterly business review with our clients where we talk through things like:

  • Processes that can be streamlined if done differently
  • Checks with different data providers that could improve pass rates
  • Ways of achieving cost efficiency by combining different checks

Our platform captures this transactional data for clients to identify and think about implementing efficiency improvements that go way beyond routine maintenance of the solution.

Create a great customer experience

If I still haven’t convinced you about the time and resources needed to build, maintain and improve an in-house compliance solution, think about the customer experience.

Those people applying for your products want a fast and seamless experience of making an application; validating their ID; going through a risk renewal process. Delays in due diligence cause customers to go elsewhere.

For applications started in PassFort, we can achieve an average Straight Through Processing (STP) rate of 91%. Now, it’s really important to emphasise that every customer is different – STP will never be possible for some compliance workflows and should never be possible on others in order to account for high-risk applications.

Nevertheless it’s possible to have 91% of applications go directly through a compliance process – such as onboarding – without any manual intervention.

A company building their own internal case management system and integrating a single API to a data provider to pass compliance checks on applications would probably be able to automate (and this is a generous estimate) around 70%. So, what about the remaining 30%?

It’s easy for this 30% of applicants to get caught in a bottleneck either in terms of a queue for manual review or a queue for escalation and approval.

When manual review or escalation is needed on an application in PassFort this is immediately flagged to the relevant team.

We know delays in onboarding are best kept to a minimum - it creates better customer experiences and reduces the volume of drop offs in the application process. This crucially enables compliance to be part of bringing revenue into the business.

Some simple maths to finish

A full stack developer in the UK would cost around £50k per year in terms of salary alone.

If they were dedicated to the task of building your compliance solution, they would develop a case management system, map automated compliance workflows, establish integrations with different data providers, run and test the system, launch it and then move into maintenance and improvement cycles.

PassFort would be very happy to compete with this. We’re ready and set to go, plus we’re confident we can drive a great experience for your teams and customers.

I’ll leave you with one final thought from a client who said: "We wouldn't try to build our own email platform, we'd buy Outlook. So why would we build our own Compliance platform?"

Get in touch

If you're thinking about implementing a compliance solution for customer lifecycle management processes, like onboarding and risk renewal, get in touch - we would love to hear from you.

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