What SaaS sprawl and shadow IT look like in a fintech
Shadow IT is any software a team buys or signs up for outside the approved IT and procurement process, and SaaS sprawl is the pile of overlapping, underused subscriptions that builds up as a result.
Fintech teams move fast and buy their own tools. A growth marketer signs up for a survey platform and uploads a customer list. A data analyst puts an AI notebook on a card to test a credit model. Collections trials a dialer. Each purchase is small and each solves a real problem that day. Vendor research from Zylo found business units now control 81% of SaaS spend, while IT directly manages 15%.[1]
The trouble shows up later. IT hears about the survey tool when the vendor emails a renewal notice for 40 seats. Risk hears about it when an auditor asks for the list of third parties that process customer data and the tool is not on it. Finance sees three project tools, two e-signature tools and a dozen AI subscriptions spread across card statements, each coded to a different cost center. Expense-based SaaS spend rose 267% year over year in the same research.[1]
Head of IT
Supports and secures tools nobody told them about, and finds new vendors only when access or renewal problems land in the helpdesk queue.
"When did we start using this?"CFO
Sees software cost per employee climb every quarter with no single list of what the company pays for.
"Why are we paying for three of the same thing?"Risk and Compliance Lead
Has to evidence third-party oversight to auditors and regulators, but the vendor register misses everything bought on a card.
"Which of these tools can see customer data?"Team Lead
Needs a tool this week and sees the official route as a multi-week wait for a security questionnaire.
"My card works today. The process takes a month."Is shadow IT spreading through your fintech?
Tick every statement that is true today. Three or more means the problem is likely costing you real money.
Six root causes behind software sprawl
Banning cards does not fix sprawl. These are the reasons teams go around the process in the first place.
The official route is slower than a card
If requesting a tool means a ticket, a risk questionnaire and a two-week wait, a team lead with a deadline will use a card. The process creates the workaround.
Card and expense spend never reaches a vendor record
Card transactions get coded to a GL account and forgotten. Nothing turns a recurring charge into a vendor profile with an owner, a contract and a renewal date.
Risk reviews are one size fits all
A note-taking app and a tool that processes loan applications face the same questionnaire. Teams avoid a review that feels out of proportion to the purchase.
No one owns the renewal
The person who signed up changes roles or leaves. The subscription auto-renews at a higher seat count because nobody had the notice date.
No shared catalog of approved tools
Teams cannot see that the company already pays for an approved alternative, so they buy the one they found first.
Free trials convert without a decision
A trial started on a personal or corporate card turns into a paid plan after 14 or 30 days, and no one decides whether it should.
What software sprawl costs a fintech
Vendor research on SaaS usage points to the same pattern: spend is moving away from IT and a large share of licenses go unused.
The direct cost is overlap and waste: duplicate tools, unused seats and renewals at uplifted prices nobody negotiated. In financial services the indirect cost is often larger. A tool holding customer data that never went through vendor due diligence is an unmanaged third party, which can become an audit finding, a data protection issue, or a scramble during a regulator's review. There is also the hidden labor of IT and finance reconciling card statements to find out what the company actually uses.
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The expert playbook: six practices that bring shadow IT into the light
These practices work with spreadsheets or any system. Build the inventory first, then make the approved route faster, then tighten renewals.
"The best of breed market has pushed 15 to 20 tools onto what should be one vendor relationship, and fintechs feel it first because every team is technical enough to buy their own. Blocking cards just moves the problem. Make requesting a tool quicker than expensing it, and the purchases come to you with the data you need."Md. Kafil, Co-founder and CEO, Zapro. Former senior product specialist on SAP Ariba Network and procurement transformation manager at KPMG.
Build the inventory from money, not surveys
Assign a business owner and a renewal date to every tool
Tier vendors by data access
Publish an approved tool catalog
Route software purchases through a request, even when a card pays
Review renewals 90 days before notice dates
"Running the vendor portal at Voonik, the rule was that every supplier got re-verified each year, and hundreds were frozen over one missing document. Card-bought software skips that entirely. Nobody asks for the certificate because nobody knows the vendor exists. You cannot re-verify a third party you never onboarded, so the fix starts at the request."Daniel Sagayaraj, Co-founder and CTO, Zapro. Previously built and ran supplier onboarding and payments for a 15,000-supplier marketplace at Voonik.
How Zapro turns shadow IT into a managed vendor list
Zapro gives teams a quick way to request software and gives IT, finance and risk a single record for every vendor, contract and renewal, so tools stop appearing for the first time at renewal.
| Root cause | Zapro capability | What changes |
|---|---|---|
| Official route slower than a card | Procurement: "Prompt to buy" with Z1 and clear approval workflows | A team lead describes the tool in plain language, Z1 drafts the request, and low-risk requests move through quickly. |
| Card spend never becomes a vendor record | Vendor Management: fast onboarding with templates and centralized profiles | Every approved tool gets a vendor profile with documents, conversations and compliance status in one place. |
| No one owns the renewal | Contract Management: renewal and expiry alerts with version tracking | Contracts sit in one repository and owners get alerts before renewals, so each one is a decision. |
| No view of overlap across teams | Spend Analytics: spend by vendor and category with budget tracking | Software spend from POs and invoices shows by vendor, category and team, so overlapping tools surface. |
| Access and identity disconnected from purchasing | Integrations: SSO with HR and identity systems, ERP and accounting sync | Zapro users and approvers follow your identity setup, and vendor data stays aligned with the ledger. |
Zapro connects with your ERP or accounting system and supports SSO with your identity provider, with unlimited users on every plan so any team lead can raise a request. See Zapro integrations and Zapro for Financial Services.
A 30, 60, 90 day plan
Days 1 to 30: Find every tool
- Pull 12 months of card, expense and AP software charges
- Group charges into one vendor inventory
- Name an owner for each tool
- Flag tools that touch customer or payment data
Days 31 to 60: Open a faster door
- Define three risk tiers with review depth for each
- Publish an approved tool catalog
- Launch a short request route with auto-approval for low risk
- Load contracts and renewal dates for the top 30 tools
Days 61 to 90: Cut and consolidate
- Review every renewal due in the next 90 days
- Consolidate overlapping tools to one per job
- Add unreviewed data-handling tools to the risk register
- Report software spend by team to budget owners
KPIs to track progress
| KPI | How to calculate | Review |
|---|---|---|
| Inventory coverage | Software vendors in the approved register divided by software vendors found in payment data | Quarterly |
| Pre-approved new vendors | New software vendors with an approved request before first payment divided by all new software vendors | Monthly |
| Renewals reviewed on time | Renewals reviewed before the notice date divided by all renewals due | Monthly |
| Tool overlap | Number of job categories with more than one paid tool | Quarterly |
| Unreviewed data-handling vendors | Tools with access to customer or payment data that have no completed risk review | Monthly |
| Request-to-approval time | Median time from software request to approval, by risk tier | Monthly |
Go deeper with our guide to vendor management system guide.
What a Zapro customer saw after moving this work into one workflow
"Zapro made procurement effortless with a user-friendly interface and stellar support. Our team and suppliers adapted quickly, and we're now seeing faster approvals and smoother collaboration."Maria Rowan, Business Controller, Repromed
Why Zapro for this challenge
Shadow IT is what happens when buying a tool is faster than asking for one. Zapro makes asking faster, then keeps every approved tool, contract and renewal on one vendor record that IT, finance and risk all trust.
Requests in plain language
With Prompt to buy, a team lead describes the need and Z1 drafts the request, which removes most of the friction that sends people to their card.
One record per vendor
Vendor profile, compliance documents, contract and renewal alerts live together, which is what an auditor asks to see for a third party.
Unlimited users
Every plan includes unlimited users, so the request route can reach every team without per-seat trade-offs.
Security fit for financial services
AES-256 encryption, granular role permissions, SSO and a full audit trail of approvals and changes.
When Zapro may not be the right fit
- You need automated discovery of every app employees log into, through browser or identity logs. A dedicated SaaS management tool does that, and Zapro can manage the purchasing and contracts around it.
- You have fewer than a dozen software vendors and one person already reviews every card charge.
- Your priority is license provisioning and deprovisioning inside each app rather than purchasing, contracts and vendor oversight.
Frequently asked questions
What is shadow IT in financial services?
Shadow IT is software or cloud services a team uses without going through IT, procurement and risk review. In financial services it matters because many of these tools store or process customer data, which makes them third parties that should appear in your vendor oversight program.
How do you find shadow IT purchases?
Start with money. Pull 12 months of corporate card transactions, expense claims and AP invoices, and group recurring charges by vendor. Then confirm each tool with the person who paid for it. Identity and browser data can add free tools that never appear in spend.
Should we ban corporate cards for software?
Usually not. Cards are a convenient way to pay. The fix is to require a quick request and approval before a new software vendor is paid, and to make that route fast enough that people use it.
How often should SaaS subscriptions be reviewed?
Review each tool at renewal, starting about 90 days before the notice date, and run a full inventory refresh at least quarterly. High-risk tools that handle customer data may also need an annual vendor risk reassessment.
Can procurement software control SaaS sprawl?
It controls the part that matters most for spend and oversight: requests, approvals, vendor records, contracts and renewals. Zapro covers those steps. For discovering every app employees log into, pair it with identity data or a SaaS management tool.
About the experts behind this page
Sources
Editorial note: this page is published by Zapro, which sells procurement software. Best practices are written to work with any tool, and figures are cited to their original publishers. Last reviewed 29 September 2026; next review due March 2027. See how the Procurement Challenges Directory is researched and reviewed.