How to Save $500K in Engineering Cost Without Compromising Security
For rapidly growing fintech and insurtech firms, engineering expenses can spiral out of hand very fast. Product teams are tasked with delivering quickly, remaining compliant, and staying up and running—while navigating increasing technical debt and changing regulatory demands.
But here’s the reality: most scale-ups spend hundreds of thousands of dollars more per year on engineering without knowing it. The best news? You can significantly reduce costs without sacrificing speed, quality, or security.
Fintech and insurtech scale-ups can save as much as $500K on engineering expenses using efficient architecture choices, improved cloud use, and expert engineering partners.
DevSecOps and cloud-native approaches minimize costly rework and compliance roadblocks.
Prevent overengineering and do “buy vs. build” for non-core functionalities.
Hybrid U.S. + LATAM teams provide strategic cost savings without quality or timezone trade-offs.
Where Fintech Product Engineering Budgets Go Off the Rails
Engineering leaders wonder, where is all the money going?
Here are the typical culprits:
Over-customization: Creating features from the ground up that can be plugged-in (e.g., KYC, payments)
Cloud overspending: Misaligned resources or not monitoring usage
Technical debt: Old systems needing constant patching and manual fixes
Siloed teams: Inadequate collaboration among product, engineering, and compliance
Why do fintech engineering projects consistently exceed budget?
Inadequate scoping, opting to build versus integrate, compliance demand underestimation, and inadequate architecture planning.
Up to 30% of IT budgets in rapidly growing companies can be wasted due to poor software quality and digital strategy misalignment, says McKinsey.
5 High-Impact Ways to Save Engineering Costs in Fintech
1. Prioritize “Buy vs. Build” for Commodity Features
Why build login or KYC from scratch when reliable vendors like Plaid, Alloy, or Auth0 exist? Focus your team on features that differentiate your platform.
Rule of thumb: Buy anything that doesn’t drive user growth or retention directly.
2. Adopt DevSecOps Early
Incorporating security in your CI/CD pipeline saves costly rework and security audits later on. Tools such as Snyk, HashiCorp Vault, and GitHub Actions make compliance more efficient.
Automate code scanning
Enable secrets management
Run compliance as code.
3. Employ Global Talent Strategically (Not Simply Cheapest)
Nearshoring (e.g., LATAM + U.S. hybrid teams) is cost-effective without the delay of time zones or the risk of quality. Steer clear of the temptation of hiring the lowest-cost vendors who do not have fintech domain expertise.
LATAM engineers are generally 30-50% cheaper
Improved overlap with US zones compared to APAC
Improved compliance alignment (e.g., SOC 2, HIPAA)
4. Design Reusability In mind
Engineering costs accrue when teams recast the same wheel for every product line.
Utilize modular architecture
Develop shared libraries for standard fintech functionality (e.g., transaction history, notifications)
Deploy microservices and containerization
5. Design Cloud Efficiency
Don’t lift-and-shift traditional architectures to the cloud. Design cloud-native applications considering cost.
Use autoscaling and spot instances
Turn on cost monitoring tools (e.g., AWS Cost Explorer, Azure Advisor)
Regular cloud audits can cut bills by 20% or higher
How do fintechs minimize cloud costs without sacrificing speed?
Cloud-native architecture, autoscaling, correct tagging, and periodic usage auditing.
Case Study: Saving $600K by Modernizing Rather than Rebuilding
A Series B insurtech firm in the U.S. had a choice: rebuild their old claims platform or update it. Their own estimates for a complete rebuild were over $1.2M.
Instead, they collaborated with a fintech-focused product engineering company that:
Refactored and modularized the legacy codebase
Migrated services to Kubernetes with CI/CD
Integrated third-party tools for claims and KYC
Result:
$600K in cost of engineering saved
8 months faster time-to-market
Smooth audit prep for their Series C fundraise
Torn between modernizing or replacing your fintech app?
Talk to a solution architect.
Cost-Saving vs. Cutting Corners: Where Not to Skimp
Save without skimping. Compliance and security can’t be an afterthought in fintech.
Don’t let these red flags:
Generic hosting over SOC 2-compliant platforms
Pen test omission to cut costs
Under-documenting systems and APIs
Do this instead:
Security-first architecture
Pre-built compliance frameworks (e.g., SOC 2, ISO 27001)
DevSecOps pipelines that scale with you
How to Audit Your Engineering Expenditure
A scrappy audit of your workflows today can uncover gargantuan savings. Begin with:
% of engineering time spent on non-core features
Cloud expenditure per active user
% of time spent on bug fixes or rework
Engineering throughput (velocity vs. story points)
Frequently asked questions
1. What is the typical cost of developing a fintech MVP in the U.S.?
Generally between $250K and $800K, depending on features, compliance, and team structure.
2. Can I outsource fintech development and pass security standards?
Yes—if your partner has experience with SOC 2, HIPAA, and other frameworks.
3. How do I determine whether I’m overspending on cloud services?
Run audits with AWS Cost Explorer or GCP Billing Reports, and identify idle or underutilized resources.
4. Do I upgrade or replace my legacy fintech platform?
Upgrading will typically save 30-50% of the cost and accelerate delivery. Rebuild only if the foundation is genuinely broken.
5. How much can CI/CD automation potentially save me?
It has the potential to cut release and bug time by 40-60%, really accelerating velocity.
Want to know how fintech scale-ups such as yours improved time-to-market by 50% with the correct engineering partner?
Schedule a complimentary consultation.
