Underwriting Automation: Better to Build or Buy?
July 14, 2021
The payments industry is continuously changing and evolving. Whether you’re a payment facilitator or independent software vendor (ISV), your risk model has to acknowledge that reality. The best practices for payfac risk management rely on underwriting automation and a custom risk scorecard.
These are highly advanced software tools, and there are really only two ways to get either of them. Either you buy them, or you build them yourself. Or rather, your IT department does.
Build Underwriting Automation Software
It’s tempting to go the DIY route and hand the job over to your IT department. After all, whether you’re a payfac or an ISV, you certainly understand your company’s needs better than anyone. While you definitely understand your business and what it needs, there are still benefits that can come from partnering with a team of experts who are highly specialized in these unique software challenges. The Merchant ScanXpress Advisory Council has more than 320 years of combined experience in the payments industry, spread across many different verticals. This in-depth experience is part of what makes Merchant ScanXpress so flexible and robust.
A common motivation for building your own product is to save some money. However, there are tremendous challenges to building a software tool that offers comparable functionality.
Even worse, the “cheap” option often turns out to be more expensive! Your IT department usually has their hands full with their regular duties. Assigning them a large software project usually means one of two things:
- IT has to hire new staff, or…
- They put in a ton of extra hours, which can lead to increased staff turnover.
If you’re really unlucky, you might get to experience both at once. Your IT staff have the skills to do what you need, but they have existing duties that are taking up most of their time. Asking them to build custom software puts them in a very difficult position. Either they rush, and deliver a relatively poor solution, or they take the needed time and resources and end up racking up a lot of costs.
Custom built software might be well suited to your business, but only as it stands today. The industry, and your business, are changing rapidly. Custom built software is usually static and will often be out of date before you even get it implemented. When you combine this with necessarily long development times, it means you’re missing out on big opportunities. Your competitors won’t hesitate to snatch these up. Our white paper, “Build or Buy? Key Technology Considerations for the Payments Industry” goes in-depth on the challenges that face an organization when they decide to treat underwriting automation as an IT project instead of a business project, and why a shortened time to deployment is essential to higher revenue..
Merchant ScanXpress is backed by a strong team of developers and subject matter experts. Their wide industry knowledge ensures that our service offering adapts along with the industry. We are constantly evolving and improving our solutions, ensuring you never miss a beat.
Customizable off-the-shelf software
The biggest disadvantage of off-the-shelf software is that it may not be perfectly suited to your business. Merchant ScanXpress overcomes this limitation with all the configuration options you need available at the click of a button. You get the advantage of custom software that’s perfectly suited to your needs, but without the high costs, long development times, or IT staff burnout associated with custom solutions.
Merchant ScanXpress also gives you the quickest time to market, and hence to unlocking new opportunities. When it comes to onboarding, victory usually goes to the swift. However, speed alone can be a disadvantage if you’re not taking adequate protection against risk. That’s why Merchant ScanXpress includes a custom risk scorecard that powers underwriting automation for payfacs and ISVs.
The risk scorecard is also fully customizable, allowing you to create recommendations and thresholds for complex cases, completely configured to the needs of your business and your vision of payfac risk management.
Building your own custom software takes time and resources, and it’s usually out of date before you can really start using it. With Merchant ScanXpress, you’ll always receive updates as new functionality becomes available, and you can rest assured that the updates will come from in-depth knowledge of the industry.