The Build Option: Pros, Risks & Realities  

Advantages of Building In-House 

• Customization & Fit
  If your audit workflows, supervisory structure, or remediation logic differ materially from industry norms, building allows you to design a solution that matches your current structure & process. However, this may be a strong indication that your firm needs to re-evaluate the reasoning behind such deviations and better align with industry best practices. 
• End-to-End Control
  In some cases, you may maintain more control over data models, integration points, security protocols, and future enhancements. However, reputable vendors can accommodate your specific needs, while ensuring end-to-end ownership of your proprietary data in a secure environment. 
• Potential Cost Savings
  In some scenarios, especially for very large firms with significant in-house engineering capacity, the cost of ongoing enhancements may be lower than perpetual licensing fees, although scalability and regulatory alignment often come at significant cost and offset potential savings over time.  
• Potential Strategic Differentiation
  If audit/oversight processes are themselves a competitive differentiator (e.g. in-house proprietary risk scoring, integration with adjacent systems), building may further highlight what makes your system and/or process unique. 

However, these possible advantages come with nontrivial challenges. 

Challenges & Hidden Risks of Building In-House 

• Up-front & Ongoing Investment
  Building an end-to-end audit management system (scheduling, questionnaires, findings tracking, dashboards, remediation, risk mgmt., reporting) is a heavy lift. Then it must be continually maintained. It’s important to understand hidden costs (maintenance, patching, evolving feature requests, underlying technology and infrastructure and database changes, regulatory change) which can erode any assumed savings. 
• Time to Value & Catch-up Risk
  In fast-changing regulatory environments, or during periods of significant growth, trusted vendors can iterate and deploy updates faster and more securely than internal teams – thus ensuring your system is not perennially behind.  
• Staffing, Knowledge, & Turnover
  You’ll need developers, designers, quality control, regulatory SMEs, product owners, and infrastructure engineers. Plus, attrition, prioritization conflicts, and competing projects can fragment focus or leave your system underfunded. 
• Regulatory Evolution & Compliance Risk
  Regulators often introduce rule changes (e.g. FINRA remote inspection standards). Staying ahead requires continuous investment and regulatory intelligence, with required updates often necessary within short timeframes. If your development team lags, you risk noncompliance. 
• Scalability Challenges
  Scaling to thousands of audit instances or multiple lines of business may uncover performance, security, or data-architecture issues. For firms that engage in M&A, the ability to ingest and scale as the firm grows must also be considered. 
• Opportunity Cost & Focus Dilution
  Building compliance tech distracts from your core business – client-facing innovation, operations, product development, etc., and can put your firm at a competitive disadvantage on the business side. In addition, the internal debate over prioritization can be a hidden tax. 
• The Hybrid Trap
  Some firms try to build “just enough” and then bolt-on third-party modules. But integration friction and versioning mismatches often result in a monolithic burden on your internal development teams and users alike. 

In many real-world cases, the assumed savings or differentiator of building fails to materialize once the maintenance, security and scalability challenges kick in.