Identity & Access Management (IAM) is a key component of security and compliance. IAM software has become an essential part of the IT landscape in the banking sector. Developing an in-house solution promises maximum flexibility and strategic advantages. However, the costs of development, operation and maintenance are often underestimated when compared to an established off-the-shelf solution. But when exactly is an in-house system worthwhile, and when is a standard product the better choice?
Why develop an in-house solution solution?
IAM is now one of the key components of a modern IT landscape. Regardless of sector or company size, the accurate, automated allocation and monitoring of access rights has become crucial to meeting the increasing legal requirements for security and compliance.
The market already offers a wide range of established IAM solutions for this purpose. Nevertheless, many companies – particularly when implementing IAM software for the first time – consider whether developing their own solution might be a sensible option. The reasons for this are varied:
- difficulties in mapping individual business processes
- system landscapes that have evolved over time with specific integration requirements
- specific regulatory requirements
- a desire for greater flexibility in the design of identity and authorisation processes
However, given the growing complexity of IAM software and the regular tightening of regulatory requirements, developing an in-house solution is becoming an increasing challenge.
Benefits and risks of in-house development
In highly specialised environments, developing IAM software in-house can create a clear competitive advantage. This applies in particular to digital platforms, SaaS providers or companies with highly bespoke authorisation models. A bespoke solution enables business processes to be mapped precisely and can create competitive advantages. Off-the-shelf solutions sometimes reach their limits here or require a significant amount of customisation.
At the same time, the decision to develop the software in-house represents a long-term commitment. This is because building IAM software involves more than just the initial development effort. The ever-increasing regulatory requirements, as well as the ongoing development of key associated technologies (OAuth 2.0, OpenID Connect) or functions (SSO, MFA, passwordless authentication), necessitate regular updates to the IAM software.
Security and stability also play a central role. Errors in identity and access management can have a direct impact on data protection, compliance and overall corporate security. Companies must therefore not only finance the development, but also the long-term operation, regular security updates, audits and adaptation to new legal and technical requirements.
In particular, the long-term costs are often underestimated. A solution that appears tailor-made at the outset can tie up considerable resources over the years. For this reason, in-house development should only be considered if there is clear business value and the necessary human and financial resources are available on a long-term basis.
Advantages of a standard IAM software solution
For the majority of organisations, an established IAM solution available on the market is the more cost-effective and lower-risk option. Modern IAM platforms already offer a wide range of features, including user and role management, SSO, MFA, provisioning, re-certification and compliance functions. At the same time, organisations benefit from regular updates, vendor support and continuous adaptation to new security standards.
Another advantage is faster implementation. Rather than developing core functions in-house, organisations can adopt tried-and-tested processes and focus their resources on their actual business requirements. This reduces both project risk and the total cost of ownership throughout the solution’s lifecycle.
Build-or-buy checklist for IAM systems
In summary, the decision for or against in-house development can be assessed on the basis of the following criteria:
- Strategic importance of IAM: Is IAM merely a supporting function or part of the core business?
- Degree of customisation: Can the requirements be met using an off-the-shelf solution and its extension options?
- Available expertise: Are sufficient development, security and operational resources available in the long term?
- Total Cost of Ownership (TCO): What costs arise not only during development, but also throughout the entire life cycle?
- Security and compliance requirements: Who is responsible for updates, audits and regulatory changes?
- Time-to-market: How quickly must the solution be ready for production?
Conclusion
In most cases, the benefits of a professional market solution outweigh the costs. Developing an in-house solution is particularly worthwhile where there are exceptional requirements or where identity management itself is a business-critical component of the organisation. For all other scenarios, off-the-shelf software generally offers the better combination of functionality, security, cost-effectiveness and future-proofing.
