CUBE recently hosted a webinar with Matthew Bernstein and Lynn Molfetta of MC Bernstein Data, as well as our very own Head of Customer Success, Lee Fairey, to discuss the growing significance of Regulatory Intelligence within Information Governance.
During the webinar, Lee, Lynn and Matthew took questions from the audience. CUBE reflects on the answers provided on topics from ROI for RegTech, to the future of information governance. In this extract, Matthew and Lynn discuss the pros and cons of buying solutions from third-party providers.
There’s always some debate about whether you should build solutions or whether you buy solutions from third parties – and the cost implications of that. Which do you think is best and are people getting that budget from the top to purchase and run it effectively?
MB: Over my career I have built and bought major systems around the management of different kinds of information. My recommendation is that if a platform exists that is already in use across a number of your peer firms, you should grab it and not build your own because it probably embodies 80% of the functionality you need. So much these days is being delivered as a SaaS product, which means it’s being maintained by somebody else and the community of users helps to keep the solution current with what you’re seeking in both functionality and underlying information.
It’s probably wrong to think you can develop it more cheaply than you can license it. You’ve really got to think hard about why you would want to build something that is essentially a utility, if there are a number of peer firms that have already coalesced around that utility. This is not like a trading algorithm. This is a utility function that’s well suited to using a utility solution.
LM: I definitely echo that. In my opinion it is optimal to buy, not build. There have been instances where I’ve worked with companies that believe building was easier and more efficient, but unfortunately that was not the case. This mindset has shifted over time. Companies today are smarter, more agile, and realize that they do not have the time, resources, or expertise within the company to keep up with the rapidly changing tech environment and are turning to the external experts to help address their information governance objectives – it’s faster, smarter and cheaper in the long run.
MB: And with regard to getting budget to pay for solutions, very few companies would say, “Oh, regulatory intelligence or compliance is our core business.” So, you’re always going to be fighting against development needs for the core business. If you’re in banking, if it’s you against a trading application or a loan processing system, that’s the revenue generator and your regulatory intelligence solution is not. To be able to say, “this is the right system to choose and we pay a licensing cost, avoid development risk, and it puts us ‘on market’ with our peers” just makes so much more sense for something that isn’t the core business of the company.