Article

    Fixed-price projects vs dedicated teams: A fintech CTO comparison

    CTOs weigh fixed-price vs dedicated teams in fintech. Compare trade-offs, costs, and scalability to choose the right growth model with Nortal.

    Service

    IT Outsourcing Staff Augmentation Global Capability Centers

    Industry

    Financial Services Fintech

    The third expert nearshoring provider has just wrapped their pitch deck, and now you're facing the decision that can shape your organisation’s next 12 or so months. Your roadmap demands external engineering support, but which delivery model serves your long-term strategy: fixed-price projects or embedded teams?

    We've worked alongside CTOs in fintech and other regulated industries through this exact decision point dozens of times. What we've learnt is that everyone pushes their preferred model: project managers favour certainty, CFOs love locked-in numbers, and engineering leads want more hands on deck. Yet, the most successful leaders don’t budge under short-lived pressures or optimise for this year’s budget rather than next year’s strategic competitive win.

    The delivery model decision will determine not only what gets built, but also how your team scales, how knowledge is transferred, and how quickly you can adapt when market conditions inevitably shift your priorities. To get past the sales pitches, here’s the clarity vendor calls rarely deliver: the real trade-offs between fixed-price and dedicated team models, and which approach fits your fintech's growth trajectory.

    Fintech engineering support: fixed-price or dedicated teams?

    Deloitte's global survey reveals that cost reduction as a primary driver for engaging external teams has dropped from 70% to just 34% among companies in recent years. For UK fintech leaders juggling FCA compliance, open banking deadlines, and competitive pressure from challenger banks, this shift reflects a fundamental change in how we think about engineering partnerships: you’re no longer buying development hours, but investing in strategic capabilities. 

    This evolution explains why dedicated teams are increasingly challenging fixed-price arrangements as the go-to delivery model. But this is not to say fixed price is useless. Let's be honest about where fixed-price arrangements excel, because dismissing them entirely would be shortsighted.

    What fixed price really means

    The concept seems simple: define your project, get a quote, and pay the agreed sum. In fintech and finance, though, reality is rarely that tidy.

    Where fixed price works best:

    - Regulatory compliance projects with a defined scope – Fixed price is a great match when requirements are clear, specific, and unlikely to change. It’s perfect for small compliance projects where exact requirements are dictated by regulators, such as GDPR portability or CMA9 API builds.
    - Budget predictability matters – Upfront cost certainty (what you pay is what you get) appeals to fintechs under investor pressure, especially around Series A/B when controlled burn rates are closely scrutinised.
    - Good for short-term or well-defined projects – A fixed price might be a fit for discrete builds, such as payment rails, compliance reporting with set fields, or integrations with banking APIs where specifications are well-documented.

    Where it breaks down:

    - Change derails it – FCA updates or new Consumer Duty rules often force mid-flight changes, leading to renegotiation, delays, and extra cost. In the fast-paced UK fintech sector and other regulated markets, this happens more often than you might expect. 

    - Collaboration stays shallow – Fixed-price providers deliver the contract, not a partnership. Extra features or iterations mean new agreements and more spending. This becomes problematic when market conditions demand rapid iteration.

    - Risk of shortcuts – Under deadline pressure, vendors sometimes optimise for time and cost rather than long-term code quality, creating technical debt you pay for later. When a project is delivered, they move away, leaving your team to deal with the fallout.

    Where do dedicated teams fit the regulated industries’ reality?

    First, a small caveat: we're not talking about traditional outsourcing or body leasing. We're talking about expert, dedicated teams that embed tightly into your organisation, often from branded offices that operate almost like global in-house centres, but with resources and payroll handled by a partner.

    In the UK fintech and regulated space, where senior engineers command salaries of £80k–120k+ and regulatory expertise can be scarce, this model provides scale and expertise without the hiring overhead.

    Where dedicated teams fit your industry particularly well:

    • Long-term team extension –Extended teams function as a natural extension of your in-house team, accumulating knowledge and even mentoring juniors on compliance-heavy work or complex API integrations.
    • Full flexibility – The biggest advantage of dedicated teams is how flexible and scalable they are. You can freely adjust scope, priorities, and pace as your needs evolve. At Nortal, we don't charge exit fees or require minimum team volumes, maintaining true collaboration freedom without locking you into rigid arrangements.
    • Accountability and knowledge accumulation: Unlike project-based, fixed-price teams who deliver and depart, embedded teams live with the outcomes of their architectural decisions. They understand your audit requirements, risk tolerances, and compliance workflows at a granular level.

    Where dedicated teams can be less suited:

    • Less cost certainty upfront – Spend flexes with team size, scope, and timeline, so this model represents ongoing and variable costs. To mitigate that, we offer flexible adaptation where you can scale down during quiet phases and expand when development accelerates, providing some cost control mechanisms. Still, it won’t match the predictability of a lump-sum contract.
    • Active management required – We handle hiring, onboarding, and payroll, but success still depends on how you integrate and lead them.
    • Not for true one-offs – If you need a single compliance report or quick API tweak, a fixed-price arrangement may be more efficient. But for evolving platforms, regulatory adaptation, or multi-phase product rollouts, embedded teams are the stronger bet.

    Fixed-price vs dedicated teams

    Factor

    Fixed-price

    Dedicated teams
    Budget predictability

    High

    Costs locked upfront (provided there aren’t any scope changes)
    Variable

    Scales with needs and market conditions
    Regulatory adaptation
    Low

    Changes trigger renegotiation
    High

    Team adapts to FCA updates seamlessly
    Time to value
    Fast

    For well-defined compliance projects
    A few weeks

    For initial setup, a faster response to market changes than a fixed price
    Knowledge retention
    Limited

    Vendor retains expertise
    High

    Team builds institutional knowledge of your business and adds to it
    Quality control

    Contract-dependent, risk of shortcuts

    Direct management control, shared accountability
    Best for

    Short and scoped compliance projects, well-defined API builds

    Product development, ongoing platform evolution, frequent compliance shifts, R&D
    Risk profile

    Scope creep, rigid contracts

    Management overhead, variable monthly costs
    Market responsiveness
    Slow

    Requires contract amendments
    Fast

    Priorities adjust within the existing team structure

     

    Which model do fintech CTOs choose – and why?

    The Series A inflexion point changes everything

    We invariably observe a recurring shift around Series A funding, where priorities shift fundamentally. Pre-funding, you're proving your concept viability to investors with constrained budgets. Post-funding, investors expect scalable operations, regulatory compliance, and competitive positioning. Yet, 75% of funded fintechs struggle with post-funding execution despite having capital.

    This shift explains why many of our clients transition from fixed-price arrangements to dedicated teams precisely at this inflexion point. The change reflects the reality that post-funding development demands continuous adaptation rather than discrete project delivery.

    Why ongoing relationships matter in UK fintech

    The regulatory landscape makes this evolution inevitable. You might start with fixed-price support to meet a specific compliance deadline, only to discover that regulatory requirements don't arrive as isolated events but cascade continuously. Anti-money laundering updates trigger changes in data retention, which in turn require enhanced monitoring capabilities, followed by modifications to customer communication. Each change builds upon the last, creating interconnected compliance requirements that extend far beyond the boundaries of individual projects.

    The same pattern emerges with technical infrastructure. Our Belgian fintech client, c-Quilibrium, started with just two developers for their 2018 proof-of-concept. But as their supply chain optimisation platform grew, one API integration led to many more. What began as discrete projects evolved into a platform infrastructure that required continuous expert attention. They eventually established three distinct, dedicated teams: Innovation, Enterprise, and Technical Support, embedded within their core operations.

    The hidden cost reality

    Lastly, there’s the cost factor. Fixed-price contracts look clean until scope reality hits. We've tracked UK fintech clients who ended up paying 40-60% above their original quotes through legitimate change requests. 

    Consider a typical evolution: you scope an API integration project, then users demand connections to additional banking partners, PSD2 updates mandate authentication modifications, and evolving fraud prevention requirements necessitate the addition of expanded data fields. Each change triggers renegotiation cycles whilst dedicated teams absorb these shifts as natural components of ongoing platform evolution. The cost structure becomes more predictable even if individual monthly expenses vary.

    Transitioning from fixed price to dedicated teams

    For CTOs considering the transition from fixed-price to dedicated teams, our experience suggests a phased approach:

    The Series A inflexion point changes everything

    Phase 2 - Targeted recruitment

    Phase 3 - Integration and optimisation

    What to ask before you decide?

    Choosing between fixed-price and dedicated teams isn't about right versus wrong. It’s about analysing where you are now and how much adaptability you'll need going forward. Here's a comprehensive checklist to guide your decision:

    What’s my funding and growth stage?

    - Fixed-price answer: Pre-Series A, when you need to demonstrate specific capabilities to investors with predictable costs.

    - Dedicated teams answer: Post-Series A, when investors expect scalable operations, and you need teams that grow with your platform.

    How often will priorities change over the next 6-12 months?

    - Fixed-price answer: If your roadmap is locked in by regulatory deadlines or investor milestones, with minimal expected changes.

    - Dedicated teams answer: If market feedback, competitive moves, or regulatory shifts could alter your development focus.

    Do I need a team that understands our roadmap and business context deeply?

    - Fixed-price answer: When the project is self-contained and doesn't require deep business knowledge beyond technical specifications.

    - Dedicated teams answer: If success depends on understanding your user base, regulatory constraints, and long-term platform vision.

    How will I handle scope creep or team turnover? 

    - Fixed-price answer: If you have rigorous internal processes in place to prevent scope changes and can effectively manage vendor rotations.

    - Dedicated teams answer: When you need continuity through team changes and flexibility to adapt scope as requirements evolve.

    What's our tolerance for management overhead?

    - Fixed-price answer: When you prefer minimal day-to-day involvement and can accept less control over the development process.

    - Dedicated teams answer: If you want direct influence over priorities, code quality, and team integration, and can invest in management.

    How important is knowledge retention after a project’s completion?

    - Fixed-price answer: When project documentation and handoff are sufficient for future maintenance by internal teams.

    - Dedicated teams answer: If the platform requires ongoing expertise that would be expensive to rebuild or hire internally.

    Ask us what model fits your business case 

    From all this, the trade-off is clear: fixed-price contracts work well for predictable, standalone projects with clear endpoints, while dedicated teams excel when you need adaptability, deep integration, and long-term partnerships.

    The key insight: successful fintech scaling requires partnerships that evolve with your organisation's maturity, regulatory requirements, and competitive position. The delivery model you choose shapes not just immediate capabilities, but long-term adaptability in an industry where regulatory and competitive changes arrive without warning.

    The consequences of human error are costly.  According to IBM’s Cost of a Data Breach Report, businesses lose an average of €3.9 million per breach, with phishing and stolen credentials being the top initial attack vectors. Furthermore, 60% of small and medium-sized businesses go out of business within six months of experiencing a cyberattack. 

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    Cyber exercises must be integrated into our security strategy to truly strengthen cyber resilience. These structured simulations test an organisation’s readiness against real-world cyber threats. They help teams practice incident response, refine decision-making processes, clarify communications channels, assure roles and responsibilities, test assumptions, hone tactics, techniques, and procedures (TTPs), and build confidence in crises.

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    Why cyber exercising matters

    • Reveals critical gaps in technical controls, escalation paths, and decision-making workflows.
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    • Strengthens regulatory and stakeholder alignment by stress-testing notification and reporting procedures in a simulated environment.
    • Fosters a culture of continuous improvement by turning lessons from exercises into actionable changes across people, processes, and technologies. 

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