In fintech today speed counts, regulatory complexity is unrelenting, and customer expectations shift continuously. Financial institutions and fintechs must make critical decisions about how best to acquire
capabilities. Do you build internally, buy an existing solution or company, or collaborate / partner? Each path has trade-offs. Choosing wisely can mean the difference between competitive advantage and costly delay or failure. Here are key insights and practical
implications for strategy when deciding whether to build, buy, or collaborate in fintech. These reflect what we see in recent market trends, case studies, and regulatory pressures.
Build: When internal innovation makes sense.
Building in-house is best if the capability is core to your strategic differentiation; when you have unique domain knowledge; when regulatory or data sensitivity demands full control; or when you can amortize cost over many years.
Examples & Implications
- If you are designing a new, proprietary risk-scoring algorithm (say using alternative data sources) that ties directly to your product’s unique value proposition, building may be the only way to maintain control of IP, data governance, compliance, and future
flexibility. - Conversely many build efforts fail in fintech, especially in AI: recent reporting suggests up to 85 percent of internal AI efforts do not succeed due to data issues, talent gaps, or misaligned strategy.
- Building also tends to require larger investments: teams, infrastructure, ongoing maintenance, regulatory compliance burdens, etc. If those are not well understood, time-to-market can blow out.
Buy: When acquiring or licensing is more efficient.
Buying means acquiring a vendor solution or buying an existing fintech (or a stake), rather than building from scratch. This becomes attractive when speed matters, the required features are well defined, or when the gap you need to fill is not central
to your unique value.
Examples & Implications
- Take BNP Paribas’ relationship with Kantox. The bank first entered into partnership with Kantox, integrating its FX risk management tools, then ultimately acquired Kantox fully to scale the platform across its corporate client base. The buy decision followed
evidence from the partnership that the capability would be valuable bank-wide. - Buying provides an existing product, with tested features, some level of maturity, support, and possibly regulatory compliance already handled. This can dramatically cut time to deploy.
- But buying also comes with risks. Purchased assets might require integration with legacy systems. Vendor lock in, licensing costs, and cultural friction post-acquisition can erode expected benefits. Also, there is risk that the acquired technology becomes
obsolete or that the vendor’s roadmap no longer aligns with your evolving needs.
Collaborate / Partner: When shared strength or agility is needed.
Collaboration covers partnerships, alliances, referrals, licensing, joint ventures. This path makes most sense when no single actor has all required strengths; when risk is high; when regulatory or market change is rapid; or when tapping into external
innovation is cheaper than internal R&D.
Examples & Implications
- An EY-Parthenon survey found that many bank-fintech partnerships fail to operationalize: about 40 percent fail due to poor alignment in strategy and execution. Delineating roles, setting good governance, and committing to measurable outcomes are critical
success factors. - Bank of America’s collaboration with fintechs for payments and treasury systems allows clients to drastically reduce manual reconciliation times. For example, through an API integration, work that once took 10 days now takes under 3 days.
- Visa’s collaboration with Affirm to introduce a “flexible credential” card (combining debit and buy-now-pay-later features) shows how collaboration allows institutions to experiment with new models without bearing full build cost or facing full regulatory
burden alone.
Framework for deciding: key criteria:
To choose between build, buy or collaborate, a structured framework helps. Here’s what businesses should assess:
- Strategic importance of the capability to your differentiation
- Regulatory and compliance risk associated with ownership vs shared responsibility
- Speed to market required by the competition or customer expectations
- Cost (both upfront and ongoing), including technical debt, maintenance, updates
- Availability of talent in house vs external partners
- Scalability and flexibility of solution
- Integration complexity with existing systems
- Partner or acquisition target quality, including culture, governance, regulatory pedigree
Expert Commentary:
We believe that the fintech sector is now entering a phase where hybrid strategies are dominating. Institutions are seldom choosing purely build, buy or partner. Instead the most successful are building core distinguishing features, buying well-scaled
components, and collaborating for distribution, innovation or market reach. Regulators increasingly expect strong governance in partnerships. Recent bank-fintech partnerships must satisfy third-party risk criteria, data privacy, cross-jurisdiction compliance,
especially around AI or alternative data. Organizations that underestimate these aspects tend to see partnership deals that stall or fail. Data from McKinsey shows fintech revenue is expected to grow at about 15 percent annually globally through 2028. Traditional
banks meanwhile will see slower growth, about 6 percent. Nested in that is growing opportunity in emerging markets, embedded finance, and open banking. With that growth comes pressure: needing to move fast, scale responsibly, and manage regulatory, operational
and reputational risk. Thus, thoughtful make-buy-partner decisions matter more than ever.
Looking Ahead:
In the next two to three years we expect to see more financial institutions establishing innovation platforms or “spin-outs” that combine these strategies: internal R&D units (build), acquisitions of fintechs for capabilities (buy), and strategic alliances
and ecosystem plays (partner) to get access to new markets or tech.
Here is a question for strategy teams and executives: How will your organisation’s existing tech-roadmap and regulatory footprint shape your decision to build a proprietary solution versus buying one or collaborating
with others? How do you position your build, buy, collaborate mix so you stay agile, compliant, and aligned with customer needs?
