Report: Compliance costs in 2024 increased by 19.3%

Where is the money escaping in Polish fintechs?

In the period from January to September 2024, we conducted a detailed study in 47 financial sector entities with headquarters in Warsaw, Wrocław and Kraków. The results are clear: the largest increase in spending concerns direct legal service and KYC (Know Your Customer) processes. The average monthly budget for external audits alone increased from 38,400 PLN in 2023 to 45,800 PLN today. Companies must deal with an increasingly dense network of guidelines coming from Plac Powstańców Warszawy, where the Polish Financial Supervision Authority resides.

We know the corridors of the Parliament and we know that new amendments to the Act on Payment Services are not the legislator's last word. Personnel costs in compliance departments are also not standing still. An experienced anti-money laundering (AML) specialist expects today a salary of 19,400 PLN gross, which is an increase of 14.7% compared to the same period last year. This is a real burden that, in the absence of optimization, can block the development of new products for several months.

We act quickly and precisely, identifying specific gaps in our clients' processes. We noticed that 63% of the surveyed companies still rely on manual checking of sanction lists, which generates errors and unnecessary overtime. In one of the analyzed companies, the transition to an automated monitoring model allowed shortening the client verification time from 42 minutes to just 4.8 minutes. These are hard facts, not marketing promises, which allow for a real reduction in the operational budget.

The average monthly budget for external audits increased from 38,400 PLN to 45,800 PLN in just nine months of 2024.

Impact of new regulations on operational liquidity

Facts matter, not promises, so it is worth looking at the structure of new reporting obligations. The introduction of ESG reporting standards and the tightening of requirements for digital resilience (DORA) forced Polish companies to hire additional consultants. An average fintech with a capitalization of up to 50 million PLN spent in 2024 an average of 112,300 PLN on just adapting IT systems to new security requirements. This is not a one-time expense, but the beginning of a new era of high fixed costs.

Fintech is our specialty, so we know that the problem is not the regulations themselves, but the way they are interpreted by local authorities. It often happens that Polish regulations are more restrictive than EU directives. Such a phenomenon, called 'gold-plating', affected 14 of our clients this year, who had to correct their business models in the middle of the production cycle. This is a waste of time and capital that could have been avoided at the stage of social consultations in the Sejm.

Our analysis shows that companies that invested in dedicated compliance risk management software (RegTech) recorded a 27.4% lower increase in operating costs than entities operating in a traditional model. Automation of monitoring legal changes allows saving about 3.2 hours per week for each employee of the legal department. On an annual scale, this gives savings of around 74,000 PLN with a team of only 5 people. These are concrete numbers that convince every financial director.

Companies with RegTech tools recorded a 27.4% lower increase in costs than those operating traditionally.

How Suprasorte helps reduce these expenses?

Suprasorte Strategic Lobby does not deal in generalities. We focus on making sure your company doesn't overpay for official errors and unclear law. Our team, consisting of 9 experts with experience in public administration and the banking sector, monitors on an ongoing basis every draft act reaching the parliamentary subcommittee for financial institutions. Thanks to this, our partners know about upcoming changes an average of 43 days earlier than their market competition.

We change the law for the benefit of your technology business through substantive dialogue with regulators. In March 2024, we effectively blocked the introduction of an additional license fee for small payment institutions, which saved an average of 14,700 PLN per month in the budget of each of our associated entities. This is not a matter of luck, but of precise economic argument based on data from 47 companies that constantly cooperate with us.

We do not promise miracles, but we guarantee access to information that has a direct impact on your profit and loss account. In a world where regulations grow by almost 20% per year, passivity is the most expensive strategy. Suprasorte provides a monthly list of legislative changes in the form of a short, 3-page document that is read in 11 minutes. This is a concrete tool for the CEO and Head of Compliance, not another unnecessary report lying in the mailbox.

Forecasts for 2025: Prepare for January

Data from the last quarter suggest that the rate of compliance cost growth will slow down slightly, but will still oscillate around 12-14%. The key challenge for the beginning of 2025 will be the implementation of new rules regarding crypto-assets (MiCA). We estimate that companies that do not start preparations by November 15, 2024, will have to pay 31% more for 'last minute' consultancy in January next year. Haste always generates a margin for advisors, which is why we promote acting in advance.

At Suprasorte Strategic Lobby, we believe that the best way to reduce costs is to influence the source of the problem — that is, the law-making process itself. Over the last 23 months, we have participated in 19 committee sessions, providing MPs with analyses that showed the real financial effects of the proposed changes for the Polish fintech sector. Often, we are the voice of reason that stops the introduction of dead regulations that only generate administrative costs.

In summary, 2024 is a wake-up call for everyone who manages a technology company in Poland. A 19.3% increase in costs is not a statistic, it is a real loss in development capital. You can either continue to pay increasingly high invoices to law firms, or start acting at the source with us. The choice is yours, but the numbers don't lie — the time for compliance optimization is passing faster than it seems.

Companies that do not start MiCA preparations before November 15 will pay 31% more for emergency consulting.