Buy vs Build: The Age-Old Dilemma in Banking

Recently, I had the pleasure of hosting Ben Goldin as the first guest for the premier episode of the Resilient Revolution , a series of podcasts and interviews aimed at sharing practices for overcoming challenges in both the financial and startup worlds. Ben is renowned in the FinTech industry, having served as the former CTO of Mambu and currently holding the position of CEO & Founder of a new digital banking platform, Plumery . One of the key questions during the interview revolved around the age-old dilemma: whether banks should build technology in-house or buy an off-the-shelf solution. In this article, we explore Ben’s vision on the subject.

“Ben, you’ve recently been featured in the FinTech Times in the ongoing debate on whether banks should build technology or outsource. In your experience, what are the most compelling reasons for banks to outsource their technology, and when should they consider building it in-house?”

Ben: I really like this question; it’s one of our important fundamental principles at Plumery. The buy vs build debate has been ongoing for decades. As with any binary decision-making approach, choosing one over the other presents challenges. Essentially, you end up with the worst of both worlds if you only consider one option. Building something from scratch, particularly something well-defined or done multiple times, will likely consume a significant amount of time without necessarily moving the needle for the organization. At the end of the built-from-scratch phase, you’ll likely find yourself in the same place as most of your competitors, essentially bringing yourself on par with what others already have. Further, you'll have to spend even more time and money to build what’s unique and differentiating for your customers.

On the contrary, if you buy everything off the shelf, you will gain some acceleration. That’s great, but the moment you want to differentiate yourself and add something unique on top of that, you typically lose all the benefits from accelerating. You end up spending a lot of money, time, and effort tailoring for your needs or adding new functionality unique to you.

"Most off-the-shelf technologies are not well-designed for flexibility, and changing or adding anything becomes very complex and expensive, if not impossible"

At Plumery, we believe in buying for feature parity and building for a competitive edge, combining both approaches and merging the best of two worlds. We have put a lot of thought and effort into our architecture and platform to support both realms equally well. We do not compromise on just one or the other; we have a clear strategy on what goes into buying and what needs to be in the build, making the journey easy for our customers. Our customers won’t have to figure out all the new architectural answers upfront, and we bring differentiation where it matters most, starting with the presentation tier. This is where it matters most, where banks want to assemble their unique way of customer interaction, represent their brand uniquely, and more.

I have been a huge believer in this buy-plus-build approach for many years, successfully implementing it in all the companies I’ve worked with.

In conclusion, when it comes to buy vs build, the real answer is a smart best-of-both-worlds approach.

Plumery’s architecture means seamless integration with already existing “build” technology. Call it composable, but that’s what the future for Fintech/Banking relations holds.

Follow me to stay updated on the next episodes of the Resilient Revolution, where we will uncover more about the challenges faced when vendors deal with banks, regulatory hurdles, and more.

To check the first episode, click here