"We could automate our compliance ourselves."
It's a phrase we hear more and more in fintech. And it's perfectly rational.
The technological building blocks exist. Large language models are accessible via API. Tech teams are solid. On paper, 'build' looks like a no-brainer:
- ✓Total data control
- ✓Fine adaptation to internal processes
- ✓Technological independence
- ✓Controlled costs in the long term (in theory)
Except that...
The real question isn't 'is it possible?' but 'is it desirable?'
Automating compliance with AI isn't delivering a fixed product you can 'set and forget'.
It's continuously maintaining a living system facing four forces that never stop evolving:
1. The evolving regulatory framework
AML directives evolve. The 6th Anti-Money Laundering Directive (6AMLD) expanded underlying offenses. The Transfer of Funds regulation imposed new rules on crypto. PSD3 and PSR are coming with their share of changes.
Concretely: each regulatory update requires reviewing business rules, adjusting AI agent prompts, validating new use cases, and re-testing everything.
2. Risks and products that transform
Your fintech launches a new product? Changes target country? Modifies its risk model?
Your compliance automation tool must follow. Not in 6 months. Now.
Real example: a fintech that launched a B2B product after 2 years of B2C. All KYB (Know Your Business) had to be built from scratch. Onboarding workflows, beneficial owner verifications, risk matrices... everything changes.
3. Changes in regulator interpretation
ACPR publishes new guidelines. EBA adopts new guidelines. A European regulator sanctions a practice we thought was acceptable.
Result: your 'perfect' tool yesterday is no longer perfect today. You need to react quickly, adjust, document, communicate internally.
4. Emerging edge cases
The 'edge case' we'd never seen appears. A new type of fraud. An atypical customer profile. A transaction that breaks all your rules.
And suddenly: your automation no longer knows what to do. You need to analyze, understand, adapt, test, deploy.
From internal tool to full product
Very quickly, the tool is no longer a simple internal automation script.
It becomes a product with everything that implies:
- 📋 A product roadmap: prioritizing evolutions, managing the backlog
- 🛠️ Technical debt: refactoring, optimizations, migrations
- 🚨 Incidents: bugs in production, false positives, false negatives
- 🔄 Continuous updates: regulatory, functional, technical
- ⚠️ Operational risks: what happens if it breaks during a regulatory control period?
And the real question becomes:
Is your competitive advantage, today, really to become the publisher of your own compliance stack?
When 'build' makes sense
There are cases where building internally is the right decision:
Your compliance IS your differentiation
You're a neobank betting on an ultra-fast onboarding experience? Your ability to intelligently automate KYC becomes a direct competitive advantage.
You have very strong business specificity
You operate in a niche market (e.g., crypto-assets, real estate crowdfunding) where no market solution meets your needs.
You have dedicated resources
A compliance tech team with Product Manager, developers, embedded compliance officers. Budget to maintain long-term.
ROI is obvious and measurable
You process 100,000+ alerts per month. Automation saves you 10 FTEs. The calculation is simple.
When 'buy' is more relevant
In most cases, outsourcing compliance automation makes more sense:
You want to focus on your core business
Your differentiation is your financial product, not your compliance stack. Let specialists handle regulatory complexity.
You want reactivity to regulatory changes
A RegTech publisher follows evolutions for all its clients. A regulatory update? It's deployed for everyone.
You don't have resources to maintain long-term
Building an AI prototype takes 3 months. Maintaining it for 3 years with a dedicated team? That's another budget.
You want to share learnings
An external tool benefits from the use cases of dozens of clients. The edge cases of some benefit others.
The 'magic AI' trap
The arrival of generative AI created an illusion: 'it's easy now'.
Yes, building a POC that automates 80% of simple cases has become accessible.
But:
- Going from 80% to 95% coverage takes 10x more time
- Maintaining 95% over time requires a dedicated team
- Managing the remaining 5% (complex cases) requires fine business expertise
The risk: underestimating total cost of ownership (TCO) and ending up with a shaky tool that creates more problems than it solves.
Questions to ask yourself
Before deciding, ask yourself these questions as a team:
1. Strategy
- Is our operational excellence in compliance a key differentiator?
- Where do we want to invest our rare tech resources?
2. Capacity
- Do we have a team that can maintain this tool for 3-5 years?
- Are we ready to manage technical debt and incidents?
3. Real costs
- What's the full cost: initial development + maintenance + dedicated team?
- How much would an external solution cost over the same period?
4. Risks
- What happens if the lead developer leaves?
- How do we handle a critical incident during a regulatory audit?
5. Hybrid alternative
- Can we start with an external solution and customize it progressively?
- Can we outsource maintenance while keeping data control?
Our conviction at Kolar
We think that compliance isn't a fixed product, it's a living service.
That's why we made the opposite choice: instead of selling a turnkey tool, we build AI agents that adapt to your existing stack.
Our approach:
- •We connect to your tools (no replacement)
- •We maintain regulatory monitoring for you
- •We manage evolutions and edge cases
- •You keep control of your data and processes
Result: you benefit from automation without having to become the publisher of your own compliance solution.
Conclusion: a conscious decision, not a reflex
Build or buy? There's no universal answer.
Sometimes, building internally is the right decision. Often, it's not.
What's important is that it's a conscious decision, based on:
- Your business strategy
- Your real capabilities
- An honest analysis of costs and risks
Not a reflex dictated by the 'magic AI' effect or fear of depending on a third party.
And you, has this build vs buy reflection in compliance automation been seriously addressed in your organization?
What were the decision criteria? Surprises along the way?
About Kolar
We help European fintechs automate their compliance operations (AML/KYC/KYB) via AI agents that connect to their existing stack. Without system migration, without having to build and maintain your own solution.
Are you asking yourself the build vs buy question for your compliance?
Let's talk for 30 minutes