Ten years ago, the build versus buy conversation in banking centered on capability. Can we actually build this? Do we have the necessary technical skills? The infrastructure? The expertise?
Today, that conversation has evolved.
Of course you can build it. Even mid-sized regional institutions now employ talented data scientists, capable developers and sophisticated technology teams. The technical barrier to entry for building almost anything in-house has largely disappeared.
But here's what we've learned after more than twenty years of working with financial institutions: the fact that you can build something doesn't mean you should. The real question is no longer about capability — it's about strategy.
The Real Cost No One Talks About
Most build versus buy analyses focus on the obvious factors: initial development costs, licensing fees, implementation timelines, etc. But these alone fail to capture the bigger picture.
The costs that matter most are the ones that don't appear in your project budget.
The Innovation Gap
Your internal build may be cutting-edge on day one, but by year three it's frozen in time while the market has moved on. Eventually, you're facing "the million-dollar rebuild"— that massive reinvestment just to catch back up. We've watched this pattern repeat itself across institutions of every size.
The Opportunity Cost
Every hour your best developers spend maintaining last year's solution is an hour they're not spending on what makes you unique. Your technology resources are your scarcest asset. The question is whether you're investing them in what differentiates you or in foundational capabilities that everyone needs.
The Single-Implementation Trap
When you build internally, you get one production environment to test against. Every bug gets discovered by your customers. Every edge case surfaces when it's already impacting your business. Vendor solutions get battle-tested across hundreds of implementations before they reach you.
A Framework for Deciding
So how do you actually make these decisions? Here's the framework we've seen work best:
Ask: Is your internal team forgoing building something that only they can tackle just to try to squeeze incremental savings versus a vendor solution?
Some technology investments create genuine competitive advantage by maximizing the connectivity and usability of workflows that are fully unique to your institution. Your proprietary underwriting algorithms. Your unique member experience. Your specialized market knowledge embedded in custom workflows. These are worth building because they’re what makes you different.
Other investments are sophisticated and business-critical...but can scale from one institution to another. Every financial institution needs them. The technology may be complex, but the competitive edge comes from executing well, not from owning the IP.
Ask: What's the total cost of ownership over five years?
Initial build costs are just the beginning. Factor in ongoing maintenance, model updates, security patches, integration upkeep and the inevitable rebuild. Then add the opportunity cost of what your team could have built instead.
Now compare that to vendor pricing over the same period. The math often surprises people.
Ask: How fast do you need to move?
Internal builds typically take 12-18 months from kickoff to production. Vendor implementations run 12-16 weeks. That's a year of delayed value. In rapidly changing markets, that delay isn't just inconvenient, it's competitively dangerous.
Where Institutions Draw the Line
The most successful organizations we work with follow a clear pattern. Their internal resources are ruthlessly focused on the problems that no vendor can actually solve for them. For everything else, they find the best specialist they can and outsource it.
This isn't about lacking capability. It's about strategic resource allocation.
One large institution told us: "We could build our own pricing workflows. We have the talent. But why would we? That's not what makes us special. We'd rather spend those resources perfecting our customer experience and risk models."
That's the mindset shift. From "Can we build this?" to "Is this the best use of our irreplaceable resources?"
The Changing Vendor Landscape
The good news is this strategic shift is possible because the vendor landscape has majorly evolved. Twenty years ago, banking technology vendors often meant rigid, one-size-fits-all solutions with painful implementations and limited support.
Today's specialized SaaS providers work differently. Continuous updates. Rapid implementations. Real integration capabilities. They've built expertise across hundreds of institutions and embedded that learning into platforms that evolve constantly.
The partnership model has matured. You get access to specialized capabilities, ongoing innovation and market-wide insights while keeping your internal resources focused on what's truly unique to you.
Making the Choice
The build versus buy decision will always require careful judgment. There's no universal answer. But the decision framework should center on strategic differentiation, not technical capability.
Build what makes you special. Your unique workflows. Your proprietary approaches. Your distinctive customer experience. These create competitive advantage and justify the investment.
Buy the sophisticated fundamentals. The specialized capabilities everyone needs but are universal problems to be solved. Let experts handle these while your team focuses on innovation that is unique to you.
The institutions winning in today's market aren't trying to build everything. They're being strategic about where they invest their scarcest resource: the time and talent of their technology teams.
Because ultimately, that's what this decision is about. Not whether you can build it, but whether building it is the highest and best use of the one resource you can never get more of — your time.
If you're evaluating pricing technology decisions and want to explore how this framework might apply to your institution, we'd love to join the conversation. Email sales@nomissolutions.com to discuss your specific priorities and challenges.
Written by: Dallas Wells, Chief Product Officer at Nomis Solutions
