Savings is an attractive feature to add. It grows balances and opens a new revenue line. Behind a simple-looking deposit account, though, sits a large amount of regulated machinery, and the decision to build it yourself is bigger than it first appears.
What building it involves
To offer savings directly you need somewhere for the deposits to be held. That means becoming a bank, or agreeing terms with banks willing to hold your customers’ money. Around that you need the operations:
- Bank agreements, each with its own contract, due diligence and integration
- Safeguarding and segregation, so client money is always identifiable and separate from your own
- Onboarding and AML/KYC, run continuously
- Money movement and rate management across every bank on your panel
- A ledger that reconciles to the penny, with reporting to prove it
Each of these is a programme in its own right. Together they take months or years, most of it before anything reaches a customer, and none of it makes your product different from the next one.
Buying the infrastructure
The alternative is to treat deposits as infrastructure. You integrate a platform that already has the bank panel, the operations and the compliance, and you put your brand and your customer experience on top. Your team builds the experience and the proposition, and buys the rest.
In practice this is the difference between launching in weeks and launching in years.
How to decide
Building makes sense if taking deposits is your core business and you intend to become a bank anyway. For platforms, advisers and fintechs, buying is faster, needs no bank panel to assemble and maintain, and keeps engineering effort on the product customers choose you for.
“If deposit infrastructure is your product, build it. If it is simply how your product holds money, buy it.”
A useful test
Ask what your customer is paying for. If they are paying for your brand, your advice or your experience, and the deposit is simply where their money sits, then the infrastructure underneath is something to buy.