Fintech thrives on innovation, advancing global financial services with modern technologies. The industry promises a lot of opportunities to ensure seamless payments all around the world. However, despite its immense potential, fintech companies, no matter the size, face a critical challenge: regulatory compliance.
Regulatory compliance can save your fintech solution from legal risks, strengthen customer trust, and accelerate growth. When entering a new market, the stakes are high, and any decision can either make it or break it. If your business doesn’t follow the specific country's fintech regulations, the consequences can be dramatic, from restricted market access to operational shutdowns.
In this blog article, we’ll discuss regulatory compliance as a strategic asset for market entry and give tips from industry leaders for cross-border fintech compliance strategy.
What fintech compliance is and why it matters
In fintech, adherence to regulatory compliance has become just as critical as leveraging innovative technology itself. Regulatory compliance means a set of procedures, laws, and rules that financial technology companies must follow to be allowed to operate in a country. These regulations help protect customers by ensuring the trustworthiness of the financial system.
For example, if your company launches a new payment app or designs a custom platform for a client, in both cases, you have to ensure the final product complies with the regulations of the target market. Without this alignment, even the most innovative solution can face delays, penalties, or be blocked from entering the market altogether.
To operate legally and build customer trust, fintech solutions must meet certain compliance standards. A fintech compliance checklist for new market often includes these critical ones:
- KYC (Know Your Customer) – verifying customer identities and preventing fraud or financial crime.
- AML (Anti-Money Laundering) – detecting and reporting suspicious transactions.
- GDPR (General Data Protection Regulation) – governing how companies collect, process, and store personal data in the EU.
- PSD2 (Revised Payment Services Directive) – requiring banks to provide instant access to customer accounts for authorized third parties, provided that the customer has given prior consent.
- PII (Personally Identifiable Information) – protecting sensitive user data for customer privacy.
Moreover, additional standards like ISO 9001 and ISO 27001 strengthen credibility. ISO 9001 ensures consistent quality and continuous process improvement to meet customer needs. ISO 27001 is a global benchmark for information security management, providing a structured framework to protect sensitive data. Both are essential for service providers or contractors building fintech products for clients.
Real consequences of non-compliance in fintech
Non-compliance can severely harm your business reputation right from the start., resulting in legal, reputational, and operational risks.
There have been real high-profile compliance failures. For example, let’s look at the case with Revolut, a British multinational neobank and fintech company that offers banking services for inspaniduals and businesses. Revolut waited for three years since its application to regulators in the UK. Only in 2024, Revolut finally obtained a UK banking regulation license, though with certain restrictions.
Revolut is far from the only one affected by non-compliance. Another notable case is N26, a multinational German fintech and neobank company based in Berlin that offers a variety of financial services to inspaniduals and businesses. In 2022, this financial institution was penalized for systematically being late in submitting critical anti-money laundering reports. It’s mandatory to provide such reports promptly when suspicious transactions are identified so authorities can take action quickly if needed. The total cost for this compliance failure was EUR 9.2 million, which is a large sum for a mistake that could have been avoided by adhering to regulations from the start.
So, you can see that even successful and recognized fintech companies struggle with compliance complexity, not to mention startups that want to expand to global markets but don’t have enough expertise.
Why compliance should be a priority in new market entry
Looking at the European fintech market, we can see that many countries have made significant progress in upholding standard regulations, as well as specific ones for each country.
France has advanced in fintech, partly thanks to government and regulatory support. Led by the Banque de France, the ACPR (France’s financial regulator), and the AMF (market regulator), several initiatives have been launched to promote innovation. As part of the EU, France follows many shared financial rules, but it also applies its own interpretation in some areas. A key milestone was the Loi PACTE, introduced in 2019, which brought clearer rules for crowdfunding, ICOs, and crypto services.
The U.S. fintech market is another attractive location for market expansion. The industry is tightly regulated at both the federal and state levels. Companies must follow AML or KYC integration in fintech expansion to prevent fraud and conduct OFAC checks to avoid dealing with sanctioned inspaniduals. Consumer protection rules like UDAAP require clear, honest communication about products and fees. When handling card payments, PCI DSS compliance is essential. A major challenge is state-by-state licensing, such as Money Transmitter Licenses, which vary and can delay national rollout.
For new fintech companies, there’s a lot of information to grasp. Startups, in particular, often struggle with the regulatory complexity that comes with entering new markets. Each country has its own legal framework and data protection standards. Without a clear understanding of these requirements from day one, product rollouts can stall or, worse, fail entirely.
The decision to integrate regulatory compliance into the architecture of your product since day one pays off in the long run and offers several strategic benefits:
- Faster approvals from regulatory bodies
- Fewer technical changes later
- More efficient scaling across regions
- Enhanced customer trust and adoption
All in all, compliance is a core part of your strategy. You can turn it into a powerful competitive advantage. If you overlook it, your business risks costly rework, missed opportunities, and long-term damage to your brand.
How to build compliant FinTech solutions: Best practices from software development industry leaders
Where to start to ensure regulatory compliance in your fintech startup? Every country has different regulations. But there are many shared standards. We’ve gathered the 10 best recommendations from top fintech developers to help you build a compliance-driven fintech architecture:
- Integrate compliance early in the development process to avoid costly fixes later
- Automate monitoring and reporting to ensure continuous compliance and quick detection of issues
- Secure coding standards to prevent vulnerabilities
- Use role-based access control and data encryption to protect sensitive information.
- Detailed audit logs for transparency and regulatory audits.
- Train developers regularly on compliance and security updates.
- Choose providers for app migration to the cloud with compliance certifications to reduce risk.
- Ensure third-party APIs are compliant and secure.
- Apply privacy by design principles to protect user data
- Build flexible systems that can quickly adapt to regulatory changes.
How NetLS helps fintech businesses build compliant solutions
At NetLS, we help fintech companies design and build secure, scalable, and regulation-ready solutions tailored to country-specific requirements across Europe, Canada, the USA, the UK, and Australia. From the very first phase of engagement, we provide technology consulting and guide our clients through compliance complexities and architecture design. As a result, we can choose and implement the best practices to ensure their products meet all regulatory standards in their target markets.
NetLS combines deep domain knowledge in digital transformation with a practical, cost-effective delivery model to provide localized compliance frameworks for fintech startups and enterprises:
- Cost optimization through efficient architectures and development planning
- Qualified fintech professionals with regulatory and technical expertise
- Innovative tech stack including .NET, Angular, Azure, and microservices
- Secure development environments to protect sensitive financial data
- Strict GDPR and PII compliance baked into product design and operations
NetLS offers financial software development to help businesses achieve a competitive edge in the industry and efficiency, delivering the following benefits:
- Reliable acquiring (transactions)
- Optimization of infrastructure costs through software usage
- Reduction of paperwork
- Optimization of existing platforms to handle high-load demands
- Improved customer experience
- Ensuring the reliable protection of financial data and transactions, which is crucial for customers
- Automation of repetitive tasks, such as through ETL pipelines, helps reduce human error and risk
- Fast processing of financial transactions and reduced customer waiting time
- Expansion of services to new markets and regions through decentralized solutions and mobile applications
- Increased customer loyalty and automated measurement of the NPS (Net Promoter Score)
- Built-in analytics and reporting that provide clients with detailed insights into their financial operations and support decision-making
- Regulatory compliance with requirements and standards, ensuring legality and security
In one of our recent projects, our dedicated development team created Automated auditing solution for a family investment fund in line with European compliance standards. We helped a French family real estate development investment fund smoothly launch its startup on a new market and gain customer adoption early on. You can learn more about our approach to building secure data architecture. NetLS has a decade-long experience in fintech development, so look at our other cases for fintech clients and see our expertise in action.