FinTech moves fast. But compliance? It doesn’t wait for your roadmap. Miss a step, and you’re not just tweaking a product backlog—you’re dealing with regulators, legal fees, and reputational damage. And if you’re in early growth mode, those distractions can wreck momentum. Here are 5 Compliance Mistakes you want to avoid.
Here are five compliance mistakes FinTech startups keep making—and what you can do instead to stay lean, agile, and safe.
Treating Compliance as a Final Step
Compliance isn’t a feature to add later. It’s part of the product.
Too many FinTech founders treat it like a checklist—something for legal to handle post-launch. That’s a quick way to burn through funding on fixes or fines. From day one, compliance should be baked into your dev cycle, especially in regulated markets like the UK, Germany, or the US.
Quick fix:
Outsource to a software outsourcing company that understands regulated industries. A team that knows how to build compliant-by-design systems can save you months of refactoring.
Relevant services:
Software development outsourcing, custom software development outsourcing
Underestimating Data Protection Requirements
Handling user data? Then you’re also managing risk.
Whether it’s GDPR, CCPA, or PSD2, every market has its own take on personal data protection. One misstep and you’re facing heavy penalties—and user trust is hard to earn back.
We’ve seen startups skip data encryption, run open APIs without authentication, or fail to separate user permissions correctly. It’s often not out of neglect—it’s just a lack of bandwidth and in-house expertise.
Quick fix:
Use outsourcing software development services that come with security audits, encryption know-how, and experience in building secure APIs.
Need back-end compliance? Our engineers have built software for financial analysis and authentication that passed financial audits in the UK and EU.
Skipping Vendor Due Diligence
Your tech stack is only as compliant as your vendors.
It’s tempting to move fast with the cheapest CRM or data analytics tool—but if they’re not compliant, neither are you. And that can backfire during funding rounds, especially when VCs ask about vendor risks.
Red flag:
No record of SOC 2, ISO 27001, or GDPR compliance from a third-party vendor? That’s a weak link.
Quick fix:
Work with an outsourcing software development company that’s used to vetting and integrating compliant enterprise cloud services. We’ve already worked with FinTech platforms managing billions in assets—vendor vetting is part of the build.
Not Scaling Compliance with Growth
Your MVP might’ve been compliant. But what about your Series A platform?
As user numbers grow, so do risks. Access controls, data flows, and security protocols need constant reviews. Without scalable systems, startups risk outgrowing their own guardrails.
Quick fix:
Use IT staff augmentation to bring in specialists during growth spikes. Staff augmentation means you keep your core team lean while plugging in niche expertise only when you need it.
And yes—our engineers speak fluent English, know TypeScript, and can join your team in days, not months.
Thinking In-House Is Always Safer
Compliance often feels “too risky to outsource.”
Founders worry that external teams won’t understand regulatory nuance, or that they’ll lose control of sensitive data. But the real risk? Stretching your in-house team too thin. That’s how mistakes slip in.
The reality:
A top-tier outsourcing software company doesn’t just bring code. They bring a proven process, industry-tested workflows, and project managers who’ve been through compliance audits before.
Code & Pepper works with startups backed by VCs, governments, and EU grants. We’ve supported projects that grew into multi-market FinTech platforms. You can outsource software development without losing control—or taking shortcuts.
How to Move Fast Without Breaking Rules
You don’t need a giant compliance department. You need the right tech partner.
At Code & Pepper, we’ve spent 15+ years helping FinTech startups build fast, scalable, and regulation-proof software. That includes:
- Building products used by banks, pension funds, and investment platforms
- Supporting clients through FCA, GDPR, and SOC 2 audits
- Providing AI services and solutions that meet regulatory and ethical guidelines
- Improving product performance by 3–5x with no downtime
- Helping clients launch faster—and raise smarter
We’re not just a Ruby on Rails development company. We’re the engineering backbone with a broad, yet dedicated tech stack, behind high-growth startups from London to Stockholm.
TL;DR
If you’re building a FinTech product, don’t let compliance be the thing that trips you up.
Avoid these mistakes:
- Bolting compliance at the end
- Mishandling user data
- Ignoring vendor risk
- Outgrowing your compliance setup
- Thinking in-house is the only way
Instead, partner with a software outsourcing company that knows the rules and builds with scale in mind.
Need engineers who get compliance—and get things done?
Let’s build software that investors trust and users love. Without the audit stress.
