Lithuanian EMI ConnectPay has completed the migration to Mars, a proprietary core banking system developed entirely in-house. For most banking companies, core banking is sourced from a specialist vendor such as Mambu, Tuum or Thought Machine. It is the foundational layer that manages account balances, transaction processing and payments, and building it from scratch is expensive, time-consuming and a significant distraction from product development. ConnectPay decided to build their own, and for a BaaS provider at their stage, it probably makes sense.
Resilience, Control and Product Velocity
The operational case ConnectPay makes for building in-house centres on three things. First, resilience: by owning the core, ConnectPay removes its dependency on a third-party vendor's uptime, release cycles and priorities. Second, product velocity: changes that previously required waiting on an external vendor's roadmap can now be shipped internally on ConnectPay's own timeline. Third, cost structure: removing external core licensing fees creates a long-term pricing advantage, even if the upfront investment to build is significant. The CTO framed it directly: an external core banking dependency is the single biggest operational risk an EMI can carry.
The Build vs. Buy Trade-off at the Core Layer
Most fintech companies reach the opposite conclusion, and not without reason. Sourcing core banking from a specialist vendor means faster time to market, lower upfront capital expenditure, and access to a product that has already been stress-tested across multiple clients. Vendors like Mambu and Tuum have invested years building exactly this kind of infrastructure, and their platforms reflect that. Building in-house means years of engineering investment, ongoing maintenance, and the risk of building something that struggles to keep pace with a dedicated vendor's product. ConnectPay has been around since 2014, which likely gave them the runway and revenue to absorb that investment. For an earlier-stage company, the same decision would look very different.
Why It Matters for Embedded Finance
ConnectPay is a BaaS provider, meaning other companies use its infrastructure to power their own embedded finance products. When a non-financial brand builds on top of a BaaS provider, they inherit that provider's infrastructure dependencies too. But what might matter even more for ConnectPay is the commercial logic that becomes hard to ignore at scale. Core banking licensing fees are essentially cost of goods sold, a floor below which unit economics cannot improve. Internal development costs, by contrast, do not grow at the same rate as account volumes. Actually, German BaaS provider Solaris made the same switch in 2021 and pointed to cost efficiency as a central motivation.
