Minimum Viable Compliance: How FinTechs Get Regulatory-Ready Without Overreaching

Compliance is often perceived within FinTech teams as a necessary burden: expensive, slow, and constantly in the way. This typically leads to two equally problematic extremes. Either compliance is ignored for as long as possible—creating the risk that regulatory gaps block market entry or deter partners. Or companies attempt to build a fully comprehensive setup from the outset—resulting in an overengineered compliance structure that overwhelms the organization financially and operationally before it even goes live.

There is a better approach. We call it Minimum Viable Compliance.

What Minimum Viable Compliance means – and what it does not

Minimum Viable Compliance does not mean doing as little as possible. It means doing exactly what is required from a regulatory and partner perspective—no more, but also no less. This distinction is critical. In product development, an MVP delivers the minimum required to create real value. A Minimum Viable Compliance setup delivers the minimum required to achieve regulatory operability.

This requires a clear distinction between three categories: what is legally mandatory, what is regulatorily expected but can be applied proportionately, and what constitutes best practice but is not yet necessary at the current stage.

The core elements of a Minimum Viable Compliance setup

For a FinTech in its early stage—typically before or shortly after licensing—the following elements are non-negotiable.

A documented AML/KYC framework is the foundation for any regulated operation and any bank or partner relationship. It does not need to be extensive, but it must clearly define who is identified, under which criteria, using which tools, and who is responsible. For many FinTechs, a lean, risk-based framework covering key customer categories and transaction types is sufficient at the beginning.

A clear governance structure with defined responsibilities for compliance, risk and AML is both a regulatory requirement and a practical necessity. Without clear accountability, gaps emerge that become immediately visible in partner reviews or investor due diligence.

An MLRO—Money Laundering Reporting Officer—must be appointed for regulated payment institutions. In early stages, this role can be outsourced, but it must be locally anchored and operationally independent. An outsourced MLRO is not a weakness—it is often the most pragmatic solution.

A complaints management framework is frequently underestimated, yet it is both a regulatory requirement and a partner expectation. It must be accessible, documented and traceable.

Finally, outsourcing documentation is required to demonstrate which functions are outsourced, to whom, under which conditions and with which oversight mechanisms. This applies equally to cloud-based tools and external service providers.

What can wait in the early stage

A fully developed internal audit function does not need to be built in-house in early-stage FinTechs—it can and should be outsourced. Comprehensive ICAAP frameworks, complex stress-testing models or advanced regulatory reporting systems are topics for later phases, not for initial licensing.

The most common mistake: too much, too early

Many FinTechs invest in compliance structures that are too complex and too costly for their current stage—often driven by generic “market standards” recommended by advisors or investors without considering the company’s actual maturity. The result is high fixed costs, overstretched teams and a compliance infrastructure that is not effectively operated.

The alternative is a modular approach: start with the regulatory core, structured in a way that allows for expansion when needed—without rebuilding or starting over.

Compliance as a growth enabler

A well-designed Minimum Viable Compliance setup is not a barrier to growth—it is a prerequisite. It enables successful bank onboarding, supports partner due diligence, builds investor confidence and provides the regulatory foundation for EU expansion. FinTechs that get this right early avoid costly rework later and prevent one of the most common pitfalls: having to build compliance structures while simultaneously trying to scale the business.