Build Vs. Buy

Peer-to-Peer or Marketplace lending platforms have transformed the lending space, making it more convenient and accessible for both lenders and borrowers, by using technology as a backbone. The industry is witnessing extraordinary growth with PwC’s analysis indicating the P2P lending market could reach $150 billion or higher by 2025.
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Peer-to-Peer or Marketplace lending platforms have transformed the lending space, making it more convenient and accessible for both lenders and borrowers, by using technology as a backbone. The industry is witnessing extraordinary growth with PwC’s analysis indicating the P2P lending market could reach $150 billion or higher by 2025. The reason these marketplace lenders have been able to disrupt the status quo is because they have identified the consumer pain point and using technology, offered agility, flexibility and better experience which the banking behemoths were not able to.

Given the growth rate and the still untapped potential in many global markets, no wonder many players now want to enter the space with their own P2P lending platforms. Most of these players are either existing lenders, financial institutions, investment management companies or people with experience in Bank and Financial Services Industry , who are probably bored of their jobs and now want to explore the realm of alternate lending. Most of them understand the lending business, some of them have access to borrowers or lenders – but few of them have expertise or access to technology.

 

So here comes a Shakespearean dilemma – to build or to buy the technology platform?

 

Why is this question important and what is at stake? We explain in detail below and lay out the options

 

    • Time to Market – Perhaps the most important determinant of your success is your time to market. Will you be one of the first few players in your geography or merely an also-ran? Launching quickly is a huge advantage so your technology has to be ready quickly. Building it in-house would take around of 10 – 18 months whereas a good, while an established software vendor can have you up and running in 1 month.

 

    • Cost Efficiency – When evaluating the cost of building vs. buying a software, keep in mind that the cost of building is not limited to the cost of development. It also includes cost of maintenance and upgrades. Buying a software solution means that the vendor takes care of maintenance and upgrades. Overall, the cost of building is typically around four  times higher than the cost of buying.

 

    • Expertise – You are most likely financial expert and not a technology expert. The project management of building a software from scratch is not an easy journey and can be full of unexpected delays. A software vendor on the other hand will provide you with a mature product that has been tested and used by others. Moreover, at the start of building the software you may not be able to fully anticipate the features required whereas buying a product will come with features that have been well thought through due to feedback loop from existing customers.

 

    • Scalability & Flexibility – Since marketplace lending is a young industry, you need technology that is scalable and flexible to grow with you. You may want to introduce a new loan product or enter a new geographic market. If you need to innovate or change something in your process, the technology should be agile enough to support this and not be a step behind. A platform built by an experienced software vendor would be much more likely to provide that than an in-house system. This is because vendors invest significant time and resources to ensure their solutions are flexible to cater to a wide customer base. A platform solution offered by a vendor would also be already supporting different loan products, making it easy for you to enhance your own loan offering.

 

P2Pforce

P2PForce is a mature software, and has quickly gained traction in the market due to the flexibility ans scalability it offers to companies looking to enter the marketplace lending space.

Unlike other such software providers, P2Pforce is built from scratch and hence more customizable. It is modular and based on APIs which means it can easily be integrated with other systems, either in parts or in whole. It is now used by clients in UK, Singapore, Estonia, Philippines, Malaysia and India.

It offers superior functionality in a cost efficient manner so that you can succeed in your quest to launch your own P2P lending platform. The software is cloud-based and can be accessed from anywhere on your browser. We also ensure that your data is secure and that you have all the technical support you need so that you never have to worry about technology, leaving you to focus on growing your business.

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