Proper database connection management is crucial for high-performance database applications, and using an external connection pooler like PgBouncer can alleviate latency issues caused by frequent connection creation and termination. By reusing connections instead of reconnecting, the average time of a transaction can be significantly improved. However, this approach still adds overhead since a connection has to be established. To maximize performance, it's essential to assess whether your application frequently opens and closes connections, and if so, consider using PgBouncer to lower latencies. Additionally, YugabyteDB's distributed SQL database architecture makes it an ideal candidate for using PgBouncer on each YSQL node, allowing for efficient connection management and improved overall performance.