Mergers and acquisitions in fintech are on the rise. Challenger banks snapping up niche providers. Investment platforms absorbing robo-advisors. Traditional players hunting for innovation through acquisition. But somewhere between the press release and the post-deal chaos, one critical piece often gets overlooked or rushed: tech due diligence.
For many executives, the focus tends to be on revenue, clients, and market fit. The product? “It works,” someone says. The platform? “Looks solid,” another adds. But ask any CTO who’s had to clean up post-acquisition messes, and you’ll hear a different story. The truth is, technical due diligence can make or break your deal’s value – especially in fintech, where tech is the product.
Let’s unpack why this part of the process deserves more than just a checkbox.
1. You Might Be Buying a Tech Time Bomb
Sure, the acquired product works fine now. But what’s under the hood? Many fintechs grow fast, patching systems together just to keep the lights on. That rapid scaling often leads to brittle architectures, spaghetti code, and zero documentation.
Once you own it, all those ghosts in the codebase are now your problem. You’ll spend months (or years) cleaning up unstable builds, rewriting APIs, or rebuilding key workflows from scratch. Worse – your developers may be stuck decoding logic written by a team that no longer works there.
A good technical audit helps you spot red flags early:
- Are core services modular or tangled?
- Is there test coverage? CI/CD pipelines?
- Are devs using frameworks that no longer have support?
- Can the current architecture scale with growth?
Skipping this check is like buying a used car without lifting the hood.
2. Integration Plans Depend on What You Actually Bought
Post-deal, data integration becomes the next major headache. You need your client data, product catalog, compliance records – all to sync with your internal stack. But here’s the kicker: if the acquired company used a completely different data model, API philosophy, or even cloud provider, integration becomes a much heavier lift.
Will your CRM, transaction engine, and KYC services connect easily – or will you need months of custom middleware and data mapping?
The earlier you understand what you’re working with, the better you can:
- Budget for the real cost of integration
- Avoid redundant development teams working on similar features
- Build a realistic post-merger tech roadmap
- Plan effective data visualization dashboards in advance
3. Hidden Security Risks Can Haunt You
Security isn’t something you fix after a merger. Weak encryption practices, outdated libraries, poor access controls – all of that can quietly exist under the surface of a well-designed interface.
And in fintech, these aren’t just technical risks – they’re regulatory liabilities.
A proper technical audit should include:
- Dependency and vulnerability scanning
- Penetration testing reports (past and present)
- Access management review
- Data encryption protocols at rest and in transit
You don’t want to discover the lack of 2FA or unpatched servers after an incident – and definitely not in the middle of onboarding new clients.
4. You’ll Avoid “Tool Stack Whiplash”
Imagine acquiring a fintech that built everything on Microsoft Azure, while your stack is fully AWS. Or they use Go and Elixir, and your team’s deep in Kotlin and Java. Now what?
This kind of stack misalignment can cause:
- Developer churn (no one wants to support a stack they hate)
- Hiring challenges (more expensive or harder-to-find talent)
- Redundant infrastructure costs
Before the deal closes, ask:
- Can we consolidate toolsets, or will we need to maintain two parallel stacks?
- Is the codebase well-structured enough to refactor gradually?
- Does the engineering culture align, or will there be friction?
Sometimes it’s worth adapting – but only if you go in with your eyes open.
5. It Affects the Client Experience, Too
A lot of teams forget this part. But technical debt impacts users more than you think.
Laggy onboarding flows, inconsistent notifications, flaky mobile apps – these all stem from code and architecture decisions. If you’re inheriting user-facing issues, that affects your reputation right away.
Worse, if the acquired product has a different design system or UX logic, clients will feel the disconnect during migration. They’ll notice the difference, and if it feels clunky or patched together, you risk losing them.
That’s why some firms turn to fintech development post-acquisition – to smooth out UX and ensure the transition doesn’t feel like duct tape over a leak.
6. You Might Be Overpaying Without Knowing It
Let’s be blunt: if the product looks great, but the code is held together with legacy frameworks and shortcuts, you’re paying a premium for future rework.
A solid due diligence process helps you calibrate valuation properly. It helps your finance and product teams negotiate real value – not just growth metrics or pitch-deck gloss.
Closing Thoughts: It’s Not Just IT’s Problem
Tech due diligence isn’t just for the CTO or engineering leads. It should be part of strategic decision-making, right alongside finance, legal, and compliance checks. In fintech, where platforms are often the whole business, you’re not just acquiring market share – you’re inheriting someone else’s technical decisions.
If you’re navigating the technical side of a merger, working with teams like S-PRO – who live and breathe fintech infrastructure – can help you cut through the fog.
It’s not about perfection. It’s about visibility. Knowing what you’re buying – and what it’s going to cost to actually make it yours.
