Modern financial products appear seamless. Behind every fintech app are cloud services, partner banks, card issuers, and dozens of contractors. When any part of that network fails, customers see it as a problem with the company as a whole.
On October 20, 2026, Revolut customers in several European countries couldn’t make card payments or send transfers. Revolut later confirmed that the disruption was caused by an outage at a Google Cloud data center in London.
Financial businesses most often run into trouble in routine operations that rarely feature in investor presentations. These include client verification, accounting for client funds, coordination with the partners supporting the product, and fraud prevention. At a small company, weaknesses in these processes can remain hidden for a long time. As transaction volumes grow, the strain increases, and problems emerge when they’re already too expensive to fix.
I’ve worked as a CFO in the fintech and crypto industries for years. At every new company, I start with an audit of its financial processes. I often find that teams still reconcile client balances against records from exchanges, custodians, and banks manually in spreadsheets. That’s normal for an early-stage company. But with each new client, asset, trading venue, and jurisdiction, manual controls become less effective. Preparing verified data for regulators or company owners can take days or weeks. By the time an audit begins, the company can no longer quickly answer 2 questions: Where is client money now, and what could prevent clients from accessing it?
Automating this work is faster and cheaper today than it used to be. AI-based tools can already match thousands of transactions from bank, exchange, and crypto custodian statements against internal accounting records. But models can make mistakes, and regulators hold the company accountable. Each process therefore needs a designated employee to review the results.
Common Problem Areas in Financial Products
I’ll cover 4 common financial infrastructure problems that emerge as businesses grow and explain how to avoid them.
Accounting Records Don’t Match Reality
The balance displayed in an app is an entry in the company’s records. The money itself is held at a bank, often through a chain involving the company, a licensed partner, and the partner’s bank. Each entity in that chain maintains its own accounting system.
As a business grows, discrepancies arise. They can be difficult to detect because teams usually reconcile the total balance, leaving errors in individual client accounts unnoticed. Those errors only come to light when funds need to be returned to individual clients, for example, when a partner exits, or one entity in the chain goes bankrupt. By then, it’s too late to correct them.
Under the EU’s Markets in Crypto-Assets Regulation (MiCA), crypto-asset service providers must place client funds in a separate bank account by the end of the next business day. That requires accurate daily records for each client.
Compliance Checks Fall Behind Growth
Financial companies must know who their customers are and where their money comes from. Marketing can attract new customers much faster than a company can hire and train compliance specialists who ensure it meets regulatory requirements. When a regulator notices the gap, it closes it in the most painful way for the business: by restricting its growth or operations.
That happened to crypto exchange KuCoin in February 2026. Austria’s Financial Market Authority (FMA) barred it from accepting new customers because the company no longer had staff responsible for anti-money laundering and sanctions compliance. The exchange received its European license just 3 months earlier.
The Product Depends on Other Companies’ Licenses
Fintech companies often operate under a partner’s license, issue cards through a third-party issuer, and keep client funds at a partner bank. If one company in this chain drops out, the product can stop working for every company that relies on that partner.
In 2026, this happened at least twice:
- In January, Poland’s Financial Supervision Authority (KNF) revoked the license of payment company Quicko. Huawei watch owners in Poland temporarily lost access to contactless payments.
- In March, the Bank of Lithuania revoked the license of electronic money issuer Paytend Europe. Cards issued through it by other companies stopped working, and crypto exchange BingX was among those affected.
In both cases, companies that didn’t violate any rules lost a key product feature.
The Digital Operational Resilience Act (DORA) already requires financial companies to keep a register of contracts with IT vendors. There’s no equivalent requirement to document dependencies on financial partners. As a result, companies may underestimate the risks associated with banks, card issuers, and license holders that their products depend on.
Fraud Risk Is Shifting to Companies
According to a joint report published in December 2025 by the European Banking Authority (EBA) and the European Central Bank (ECB), fraudulent payment transactions in the European Economic Area (EEA) totaled €4.2 billion in 2024, up 17% from the previous year.
A growing share of fraud involves scammers persuading clients to send money themselves, sometimes by posing as bank or payment provider employees. EU regulators are steadily shifting this risk onto payment companies. For example, the new Payment Services Regulation (PSR), which is expected to start applying in 2028, would require providers to reimburse clients who fall victim to such scams.
For fintech companies, this brings additional costs and expands their financial liability for fraudsters’ actions. Under certain circumstances, payment providers will have to cover losses even when clients authorized the transfers themselves.
How to Prepare Financial Infrastructure for Growth
Financial processes need to be designed for future growth so companies don’t have to fix problems in the middle of a crisis. Here’s where to start:
- Reconcile balances daily. Compare client balances with statements from banks, exchanges, and custodians, both in aggregate and for each individual client. Assign an owner and a resolution deadline to every discrepancy. Have someone other than the person who prepared the reconciliation review it.
- Keep client and company funds separate, and plan for returning client money. Maintain separate accounting records and hold the funds in separate accounts. Determine in advance how long it would take to return client funds if the company or a partner ceased operations (required under many licenses). Don’t allow an employee to make a payment or withdrawal without additional approval. Have an external auditor review the segregation of client funds annually.
- Spread funds across multiple partners. Don’t concentrate client funds and the company’s own liquidity at a single bank or, for crypto companies, a single exchange or custodian. Set exposure limits for each partner, map dependencies on banks, card issuers, and license holders, and determine in advance how long it would take to switch to a backup partner. Circle, the issuer of the USDC stablecoin, showed why this matters. In March 2023, it had around $3.3 billion in reserves tied up at the failed Silicon Valley Bank.
- Scale compliance alongside sales. Before entering a new market or launching a product, assess whether the compliance team can handle the additional flow of customers. Periodically review the results of automated checks manually.
- Include fraud losses in product economics. Estimate expected losses using the company’s own data and industry statistics, and include them in product economics alongside fees. Limit the risk of large, one-off losses, including through transaction limits for new customers.
These measures can’t eliminate outages and errors, but they help companies detect problems earlier and avoid relying on a single solution, partner, or employee. They don’t all need to be implemented at once. The right pace depends on the size of the business and how quickly it’s growing.
Is It Too Early for a Startup to Consider This?
Early-stage companies typically focus on customer acquisition and increasing transaction volumes, so financial processes often take a back seat. A young business doesn’t have the resources of a large financial institution, and it doesn’t need infrastructure of the same complexity. This principle of proportionality is also reflected in European regulation. For example, the proposed Third Payment Services Directive (PSD3) calls for payment institutions’ wind-down plans to account for their size and the nature of their business models.
Delaying improvements to financial processes until transaction volumes become substantial is risky. Large companies have the resources to address violations and withstand restrictions imposed by regulators. For a small business, the same situation could result in the loss of its license.
That’s why companies need to monitor the movement of client funds and understand the risks that could limit clients’ access to them from the outset. While the business is still relatively small, it can introduce the necessary processes gradually. As the number of clients, transactions, and partners grows, accumulated problems become harder to resolve, especially under pressure from regulators.
