Finance technology continues to evolve at high speed, yet many systems and workflows are not keeping up. Across Europe, financial institutions and fintech scale-ups are dealing with hidden friction points that slow down innovation, frustrate teams, and create unnecessary risks.

Below are ten of the most common challenges we see in the market, together with real examples of how they play out in practice and why forward-thinking teams are acting quickly to address them.

1. Legacy Systems That Won’t Let Go

Even with modernization programs underway, many financial institutions still depend heavily on decades-old technology such as COBOL and rigid Java stacks. In 2023, a German savings bank experienced a full day of downtime after a seemingly minor update to its legacy core system triggered cascading failures. These outdated infrastructures create fragility, slow down innovation, and make integrations with modern platforms far more complex than they should be.

2. Data Silos and Format Fragmentation

Finance teams still find themselves working with data scattered across spreadsheets, ERPs, emails, and proprietary databases. Inconsistent formats and siloed sources make alignment difficult. A French fintech spent several weeks in 2022 preparing audit-ready reports because it had to manually reconcile mismatched data from multiple tools. Without unified access and standardized structures, automation initiatives stall and data-driven decision-making remains limited.

3. Manual Reconciliation Workflows Drain Time and Focus

Despite the growth of digital tools, many reconciliation workflows remain manual. A survey of UK finance teams revealed that more than 60% view reconciliation as their most time-consuming task. Spreadsheets and manual transaction matching not only consume countless hours but also introduce risks of human error. This becomes particularly painful at month-end and quarter-end when accuracy and speed matter most.

4. Ever-Shifting Security and Compliance Mandates

The regulatory landscape across Europe is increasingly complex. GDPR fines levied against Dutch companies in 2023 showed how compliance missteps can be costly. At the same time, interpretations of PSD2 continue to evolve across different EU markets, creating uncertainty. Layered on top of this are rising cyber threats, such as the ransomware attack on a Scandinavian payroll provider that disrupted services and data access. Finance and security teams find themselves operating in a near-constant state of high alert.

5. Fragile Banking and Payment Integrations

Reliability of bank APIs remains a serious concern. European companies often face disruptions when APIs are changed without sufficient documentation. A Czech neobank repeatedly experienced service breakdowns after undocumented SEPA API updates. With no universal standards in place and test environments that rarely mirror production behavior, payment flows are fragile and prone to breaking during live operations.

6. Inconsistent UX Across Channels Frustrates Users

When modules are built at different times by different vendors, user experience quickly becomes fragmented. Clients may need to re-learn workflows depending on whether they are using mobile, desktop, or tablet versions of the same application. A Polish accounting SaaS provider lost customers after feedback highlighted frustration with inconsistent experiences. Today, consistency and intuitive design are no longer optional extras, they are fundamental expectations.

7. Performance Bottlenecks During Critical Operations

Financial systems must perform reliably under pressure. During peak activity windows such as payroll disbursements or fiscal closing, some platforms buckle under load. At the end of 2023, a payroll provider in Southern Europe struggled to process payments for more than 40,000 users due to backend services that could not scale. These bottlenecks erode trust and show that performance under pressure is a non-negotiable requirement.

8. Delayed Insights from Batch Processing Models

Real-time finance is often spoken about, but in practice, it remains out of reach for many. Batch jobs and periodic polling still dominate core processes. The limitations of this approach were made clear when a Spanish trading app lost a significant number of users because it could not reflect transaction statuses during periods of high market volatility. Customers today expect instant feedback and transparency, and batch models cannot keep pace with those expectations.

9. Limited Extensibility and Lock-In Risk

Some platforms operate as black boxes where even small adjustments require significant external involvement. An Austrian enterprise found that making a simple workflow change demanded the services of external consultants, driving up costs and slowing delivery. Lack of extensibility increases the risk of vendor lock-in and creates long-term barriers to innovation and agility.

10. Disconnect Between Finance and Engineering

Finance teams usually communicate in terms of spreadsheets, while engineering teams think in terms of APIs and code. Without a common framework or language, misalignment is inevitable. A Dutch scale-up spent weeks reworking a project after engineering teams made incorrect assumptions about tax logic based on vague finance documentation. Building bridges between these two worlds requires shared context and stronger collaboration tools.

Moving Forward

Each of these friction points represents more than a challenge. They are also opportunities to modernize, to automate, and to deliver stronger, more resilient finance solutions. Forward-thinking teams across Europe are already addressing them by re-architecting core systems, improving collaboration between departments, and putting user experience at the center of design.

At QuantumSoft, we believe progress comes from both deep technical expertise and close partnership with finance teams. By aligning on context, designing scalable systems, and building integrations that last, companies can remove hidden friction and unlock their full growth potential.