The Buy vs. Build Dilemma in Banking Technology
With more than 17 years in banking and financial software technology, I’ve seen first hand the challenges and opportunities banks face when updating their systems. I’ve worked with leading banks and financial institutions to enhance lending processes and advise on balancing innovation and efficiency. When it comes to the buy vs. build debate, one thing is clear to me: the right partnerships can unlock tremendous potential for banks.
Why Building Internally May Create Limitations
Banks building their own systems are like chefs farming their own wheat instead of using the pantry of high-quality ingredients already available. While it may feel like they have more control, the result often involves wasted years, skyrocketing costs, and missed opportunities.
Control is meaningless if the system doesn’t deliver. I’ve seen banks pour years and tens of millions into in-house projects, only to watch competitors who embraced proven, scalable third-party platforms surge ahead. True customization doesn’t require starting from scratch; it’s about selecting adaptable solutions that fit a bank’s specific needs.
The Power of Strategic Partnerships
Many banking technology providers have already designed systems that can scale, meet compliance requirements, and adapt to evolving regulations. By partnering with these experts, banks can focus on their true strengths—customer insights, risk management, and agility.
Leadership plays a critical role here. Choosing external solutions is a strategic investment. It shows that an organization prioritizes innovation and efficiency. I’ve worked with banks that redirected failing internal projects toward expert partnerships. For example, a tier one bank with more than 1,000 branches chose to partner with nCino instead of building in-house, saving time and costs. Developing their system internally would have taken around 5x longer and custom development would have cost 2x as much. The decision to partner with nCino to implement a loan origination solution led to faster market entry and response, enabling faster growth in a cost-effective manner.
How AI Amplifies Human Expertise
The introduction of AI brings even greater opportunities. It’s not about replacing people but empowering them. Automated platforms and AI help bankers shift away from repetitive tasks, enabling more meaningful client interactions and smarter credit decisions. But to harness these benefits, banks need robust, streamlined foundational systems in place.
Shaping the Future of Banking
The future of banking isn’t about mastering every piece of technology or coding everything internally. It’s about recognizing where competitive advantages truly lie and forming partnerships that allow teams to focus on delivering exceptional customer experiences.
If your bank is still investing heavily in building systems in-house, ask yourself this: what could you achieve if those resources were redirected to improving customer experiences or launching innovative products?
For deeper insights, download our comprehensive guide on the buy vs. build dilemma. And if you’re willing to travel to Stockholm on June 13, join us for a breakfast event with Nordic FinTech Magazine, where we’ll explore these ideas further. Register here.