Build vs Partner: Mapping the Decision

This is Part 2 of a 3-part series on neobank infrastructure for healthcare. Part 1 covered FBO account complexity. Part 3 analyzes unit economics.

Six months into building CLIN neobank infrastructure, I hit the decision every fintech founder encounters: build or partner. For healthcare practices, this decision carries complexities that make the traditional fintech playbook inadequate.

Consumer neobanks can plug into generic BaaS providers and launch quickly. Healthcare neobanks need specialized compliance, unique account structures, and regulatory expertise that generic providers don't offer.

The build option was initially attractive. Custom healthcare account structures (segregated professional funds, trust accounting, insurance receivable tracking). Direct compliance integration with professional license verification and state board monitoring. Deep API connections to practice management software. Proprietary infrastructure harder for competitors to replicate. But the reality: even building your own infrastructure requires partnership with a chartered bank for FDIC insurance. Healthcare banking regulations cross federal banking law, state professional licensing, HIPAA, and industry oversight. Conservative estimate: 18-24 months for MVP, 36+ months for full feature parity. Minimum $2-3M for infrastructure, compliance, insurance, and legal costs before serving a single customer.

The partnership landscape for healthcare banking is thin. Generic BaaS providers (Synapse, Column, Unit) don't understand healthcare professional license requirements. Their account structures can't handle segregated professional accounts or trust accounting. KYC doesn't include professional license verification. Settlement is optimized for consumer paycheck cycles, not healthcare practice cash flow. Traditional healthcare banks (PNC Healthcare Banking, Fifth Third Healthcare) understand the market but lack modern API infrastructure. Healthcare-focused credit unions provide specialized services but with limited tech integration. Emerging healthcare BaaS players exist but with limited track records.

During our evaluation, Star Bank (name changed) emerged as a potential partner. Healthcare expertise, established compliance processes, modern API infrastructure, strong regulatory relationships. Their proposal looked promising: 6-month integration versus 18+ months building, $150K setup versus $2M+ to build, established compliance processes versus learning healthcare regulations from scratch, immediate FDIC insurance and charter access.

The negotiation revealed the limitations. Limited customization: their platform supported common healthcare needs but couldn't accommodate practice-specific features we wanted. Revenue sharing: a 60/40 split on interchange and account fees significantly impacted unit economics. Integration constraints: their APIs supported basic functionality but lacked deep practice management integration. Growth limitations: infrastructure could support hundreds of practices but wasn't designed for thousands.

The cost comparison was stark. Build option: development team at $150K/month for 24 months ($3.6M), compliance and legal at $500K setup plus $100K/month ongoing, insurance and bonding at $200K annually, regulatory fees and audits at $150K annually. Total: $4.5M+ before serving a first customer. Partnership option: $150K setup, 40% revenue sharing, $5K-15K monthly platform fees, $200K internal integration costs. Total: $350K setup plus ongoing sharing.

We chose partnership for capital efficiency ($350K versus $4.5M+), time to market (12-18 months versus 24-36), risk mitigation (partner's existing compliance expertise), and learning opportunity (understand healthcare banking operations before potentially building proprietary infrastructure later).

The Star Bank partnership ultimately fell through. Technical due diligence revealed that integration complexity required custom middleware that eliminated the time-to-market advantage. Critical healthcare features would need custom development on their platform. The revenue sharing made unit economics unworkable at projected volumes. Infrastructure couldn't support 5-year growth projections.

Here's what the process revealed: healthcare practices didn't need better banking infrastructure. They needed better financial decision-making tools. Every partnership discussion focused on holding, moving, and tracking money. But our 777 survey responses showed practices struggling with understanding money: cash flow forecasting, financial planning, operational decisions.

That insight led us to pivot from CLIN neobank infrastructure to Dentplicity decision intelligence. Instead of building banking infrastructure, we built decision-making tools that integrate with existing banking relationships. The pivot proved correct: 6 months to launch versus 12-18 for banking partnership, $200K to build versus $350K+ for banking setup, immediate product-market fit, and simpler partnerships.

Data sources: CLIN partnership evaluation documentation (2024-2025), Star Bank partnership analysis, healthcare BaaS provider research, build vs buy cost analysis