Hacker's Handbook

Why Some Fintechs Scale Seamlessly; and Others Crash and Burn

Most fintech backends break under pressure. Yours doesn’t have to.

Fintech is a ruthless game. When your backend crashes, the consequences are serious. Transactions freeze, customers panic, and regulators start sending you very unfriendly letters.

I've spent decades building financial backends, from Klarna’s early days to scaling systems for companies like RedCare, Aeternity, Deutsche Telekom, and Delta Exchange. The secret to successful fintech scaling involves performance and compliance in equal measure.

Let’s unpack why fintech backends break and how smart companies keep everything running smoothly.

Epic Scaling Fails (And What We Can Learn)

Solaris Bank: Fast Growth Meets Regulatory Nightmare

Solaris Bank exploded in popularity as a banking-as-a-service platform. Unfortunately, they moved so quickly they left compliance behind. Germany's BaFin eventually stepped in, banning new customer sign-ups and slapping Solaris with a €6.5M fine.

Compliance should be the foundation of your fintech strategy, not something you add later.

N26: Growth Gone Wild

N26 scaled rapidly but overlooked crucial anti-money-laundering systems. Regulators capped their growth at 50,000 new customers per month and handed them a painful €9.2M fine.

This illustrates clearly that technology and compliance need to scale simultaneously.

Trustly: The IPO That Never Happened

Trustly faced major issues due to weak customer verification processes, especially in gambling transactions. As a result, they received an €11M fine, and their highly anticipated IPO was canceled.

Transaction volume alone doesn't guarantee success without solid compliance systems.

Swish: Even Giants Can Trip

Swish, a well-established fintech service, recently encountered several disruptions. On Christmas Eve (December 24-25, 2024), Swish suffered significant downtime during peak hours, causing issues for more than 24 hours. Additional problems included temporary outages affecting Skandiabanken transactions (March 18, 2025), an ECB-related downtime (March 5, 2025), API disruptions linked to Swedbank Pay (January 20 and March 11, 2025), and a brief 15-minute outage (July 1, 2024).

These cases underscore the necessity of robust monitoring and clear communication channels.

How Smart Fintechs Scale Smoothly

Successful fintechs follow clear strategies to achieve seamless growth.

Delta Exchange: Compliance at High Speed

Delta Exchange scaled their crypto platform smoothly despite intense regulatory oversight. They built compliance directly into their backend, processing over $300M daily trades and onboarding 100,000 users without issues.

Compliance is integral for both speed and stability.

Finoa: Making Compliance an Advantage

Finoa integrated compliance deeply into their systems from day one. This allowed them to effortlessly navigate stringent German regulations, secure full BaFin licensing, attract institutional clients, and secure a €15M funding round.

Here, compliance actively supports growth instead of hindering it.

Sika Health: Automated Compliance

Sika Health successfully automated complex healthcare payment compliance processes. They quickly onboarded thousands of users without any regulatory fines or operational delays.

Automation of compliance processes simplifies scaling significantly.

Essential Steps for Every Fintech CTO

Scaling a fintech backend can be straightforward, if handled correctly. The key is to anticipate growth before it happens, design for extreme reliability, and embed compliance into the architecture from day one.

Here’s what every fintech CTO needs to prioritize to avoid downtime, compliance fines, and customer trust loss.

1️⃣ Conduct Regular Scalability Audits

Identify bottlenecks before they escalate into failures.

One of the biggest mistakes fintech companies make is waiting for a crisis before optimizing performance. Scaling problems don’t appear overnight; they build up over time due to technical debt, increased transaction loads, and expanding regulatory requirements.

A Scalability Audit helps uncover:

✅ Transaction bottlenecks – Where latency builds up under peak load.

✅ Database stress points – When inefficient queries slow down payments.

✅ System architecture weaknesses – Whether microservices or monoliths are holding back performance.

✅ Compliance vulnerabilities – Ensuring AML/KYC, PSD2, or DORA regulations don’t become blockers.

Real-world example

N26’s failure to scale AML compliance led to regulatory fines and a customer cap. If they had proactively stress-tested their compliance automation, they could have avoided months of lost growth.

CTO Takeaway: A fintech backend should be tested under extreme scenarios, not just daily traffic levels. Scalability audits should be conducted every 6-12 months—especially after launching new features or expanding into new markets.

2️⃣ Design Infrastructure for Future Growth

Build for 10x the expected traffic, not just today’s demand.

A fintech system built for 10,000 transactions per day will fail when it suddenly needs to handle 1 million per hour. Klarna, Trustly, and Solaris all faced scale-related growing pains—some overcame them, some paid the price in lost revenue, downtime, or regulatory action.

How to architect for scale

✅ Event-driven architecture – Reduce bottlenecks by making transaction processing async.

✅ Auto-scaling infrastructure – Ensure services automatically adapt to increased load.

✅ Distributed databases – Avoid single points of failure in transaction processing.

✅ Fault tolerance & failovers – Ensure payments don’t stall during outages.

Real-world example

Swish’s Christmas Eve outage (2024) left payments down for hours at the most critical shopping period of the year. A more resilient infrastructure with failover mechanisms could have prevented extended downtime.

CTO Takeaway: Designing for the future, not just today, prevents firefighting at scale. If you’re not designing for at least 10x growth, you’re already behind.

3️⃣ Embed Compliance into the System from Day One

Scaling fintech is both a technical and regulatory challenge.

Many fintech CTOs treat compliance as an afterthought, resulting in fines, growth restrictions, or legal battles. Regulators are increasingly aggressive, as seen with BaFin capping N26’s customer growth and Solaris being barred from onboarding new users.

How to make compliance scalable:

✅ Automated reporting – Reduce manual errors in AML and fraud detection.

✅ Real-time transaction monitoring – Detect suspicious activity before regulators do.

✅ RegTech integration – Build compliance as a core part of the fintech stack, not a patchwork fix.

✅ Audit-friendly architecture – Keep transaction logs immutable and ready for regulatory scrutiny.

Real-world example:

Finoa successfully scaled its crypto custody business while achieving full BaFin licensing—a rare success story in the highly scrutinized digital assets space.

CTO Takeaway: Building compliance into the backend, rather than layering it on later, ensures fintechs scale without regulatory intervention slowing them down.

4️⃣ Plan for High-Load Events (Before They Happen)

Every fintech will face a traffic surge at some point.

Black Friday, holiday shopping, regulatory changes, or viral adoption can all stress-test a fintech backend overnight. Without proper preparation, even the biggest players fail.

How to prepare for high-load events

✅ Chaos testing & simulations – Run disaster scenarios before they happen.

✅ Load balancing & redundancy – Ensure transactions are processed even during peak failures.

✅ Real-time observability – Catch anomalies before they turn into downtime.

✅ Rollback strategies – Have a fail-safe mechanism for deploying new features.

Real-world example

Deutsche Telekom’s 1B transactions/day IoT system was built with proactive scaling and failure recovery strategies allowing it to function without disruption despite extreme throughput demands.

CTO Takeaway: Every fintech must plan for worst-case scenarios. The best time to fix scalability issues is before a crisis hits.

5️⃣ Leverage Expert Guidance to Avoid Reinventing the Wheel

Scaling mistakes are costly; learn from those who’ve done it before.

How I Help Fintech CTOs Scale Without Failures:

✅ Scalability Audits – Find bottlenecks before they cost you millions.

✅ High-Performance Architecture Design – Build infrastructure that can handle 10x growth.

✅ Compliance-Ready Systems – Ensure regulatory security from day one.

We work with fintech leaders to ensure their backends scale without breaking. Let’s talk.

Send an email to info@happihacking.se