The Core Banking Market: A Growing but Consolidating Space
The global CBS market is booming, expected to reach $62 billion by 2032 with an annual growth rate of 17%. This trend is driven by traditional banks looking to launch fast, standalone digital brands — like Raiffeisen Bank International AG, which launched a digital bank in Poland, independent from its legacy systems.
In France, the culture still leans towards in-house development. Players like Spendesk or Blank only outsource the payment component (via Numeral), while Lydia and Qonto have chosen to build everything internally.
Building Your CBS In-House
✅ Advantages
- Total control: Full customization according to your product and regulatory needs, with internal teams fully aligned to your strategy.
- Vendor independence: No reliance on external roadmaps or feature delivery timelines.
- Tech agnosticism: Freedom to choose partners (e.g., card issuers, partner banks) independently.
❌ Drawbacks
- High upfront costs: Building a dedicated team or legal entity can cost between €2M and €15M in the first year.
- Slow time-to-market: Expect 12–18 months minimum, including team recruitment and training.
- Regulatory upkeep: Staying updated with AML controls, regulatory reporting, and Rulebooks can heavily affect your roadmap.
- Innovation bottlenecks: Internal capacity can limit your speed to market and product differentiation.
Buying a CBS: Plug-and-Play Core Infrastructure
✅ Advantages
- Faster deployment: Go live in as little as 3–6 months.
- Predictable costs: SaaS models offer pricing per transaction (€0.001–€0.01) and per account.
- Automatic updates: Get access to new market features without internal R&D spending.
❌ Drawbacks
- Vendor lock-in: Custom needs are subject to vendor priorities — for instance, some banks were delayed in rolling out instant payments for this reason.
- Scaling costs: Recurring fees can grow with usage, especially for features like account management or regulatory reporting.
What About Hybrid Approaches?
Some fintechs are adopting a hybrid model — combining in-house CBS with external services like Numeral for payments. Others choose composable banking platforms like Mambu, offering deep customization while outsourcing components like the ledger or credit modules.
Related Searches
- Core Banking System build vs buy
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- Mambu vs in-house CBS
- How long to develop a banking core system?
FAQ: Building or Buying Your CBS
- Is it worth building your own CBS?
- Only if your product roadmap requires high customization and you have the capital and talent to support long-term development.
- Can I start with a vendor and build later?
- Yes, many fintechs launch with SaaS CBS providers and migrate internally as they scale.
- Is CBS development really that expensive?
- Yes — developing a CBS in-house involves engineering, compliance, security, and DevOps costs that often exceed €10M in year one.
