A recent report from research company Forrester encourages banks to abandon the traditional “buy vs. build” approach to creating banking development platforms in favor of a more modern, modular approach called “buy, build, extend and assemble.” Avoka, a Colorado-based software company focused on customer acquisition and onboarding, commissioned the study on platform economics.

Don Bergal, chief marketing officer for Avoka, told Bank Innovation that customers, whether they’re individuals or institutions, expect streamlined and digitized processes from their banks. He said Avoka’s role is to help banks remove friction and that the key to an effective platform in today’s banking environment is flexibility.

Rather than build it themselves, which could literally take years, Bergal said banks can buy Avoka’s platform, with all the plumbing and common functions already built in, and with wiggle room to create a specific user experience that’s unique to the bank.

He said if you sign up for, say, a credit card with a client bank, chances are you run through Avoka’s cloud-based system without ever knowing it.

“It all feels like the bank,” Bergal said. “It’s the bank’s logos and colors and brand and everything, but it’s actually our servers and our software that are capturing the information from you, verifying your identity, checking to make sure you’re not a fraudster, maybe checking your credit, doing all kinds of things that need to happen behind the scenes in order to get you to be a full-fledged customer.”

Bergal said Avoka puts special emphasis on arranging questions in the optimal order and setting up the visual experience in a way that achieves the highest rate of completion. Adopting a flexible platform as opposed to building one internally, he said, saves time and money, and opens up doors.

The Forrester study found 42% of respondents estimated their customer-facing project would take less than 6 months, but only 26% were completed that fast. As the study says, a miss on speed is usually accompanied by a blown budget, which can create spiraling tech debt. Avoiding that snowball effect altogether, Bergal said, can keep banks interested in pursuing new opportunities.

“It gets late, it gets expensive, and the more expensive it gets, the less enthusiasm the bank has to continue the project and, eventually, it dies an ugly death,” Bergal said of the build-it-yourself approach. “Problems up front will spell more significant problems down the road for these projects. If they don’t show great results initially, it’s very unlikely that they will have a future.”

Banks started making their account servicing digital at least 15 years ago, but Bergal said it’s only in the last five years or so that banks began realizing that customer acquisition and onboarding still wasn’t digital.

“By and large, the biggest banks in the U.S. would build from the ground up,” he said. “They would build everything themselves and they established big departments, IT departments, for the hundreds and thousands of developers to do that. And you can imagine the expense associated.”

Smaller banks had no such luxury, he added.

“They would just buy a package solution off the shelf, and, by and large, those are cookie-cutter solutions,” he said. “The logo in the corner was different, but everything else was exactly the same.”

Differentiation was hard to come by.

The Forrester report recommends banks buy the basic, fundamental services every bank needs because reinventing those components will consume time and money, and needlessly so.

“You can buy it off the shelf,” Bergal said. “What you need to do yourself is what differentiates you. How can you inject the personality of your bank and the specific products that your bank offers and the way you deliver service, into the equation? That’s what you should be building and spending time on.”

A recent report on platform-based banking by Ernst & Young argues the banking industry has avoided disruption by fintechs due to a “combination of regulatory barriers, industry structure, entrenched customer relationships, and customer concerns over privacy and reputation.” These are not “insurmountable obstacles,” as the report says, given the prevalence of mobile networks and platform-based business models as well as evolving customer demands.

“For traditional banks, the key question is whether they can develop the capabilities to meet customer expectations for instant mobile access to a wide range of diverse products and services,” the EY report said. “To do so, they will have to embrace the platform-based business model, either as an active participant on others’ platforms or on platforms of their own.”