FinTech Development Outsourcing - Why Fintech Businesses Should Outsource?

Fintech has been a lot in demand lately and we are fortunate enough that even during such a COVID-19 pandemic, it is showing no signs of slowing down. Of course, there is no shadow of a doubt that COVID has led to a worldwide recession of immense proportions. In fact, several industries like restaurants, the transport sector, manufacturing organizations seem to have closed down lately Especially the ones that are heavily dependent on the conventional way of doing business. as they are unable to make it (expense is way higher than their income). The following post focuses on the concept of Outsourcing fintech software development and how it will benefit fintech businesses.

COVID-19 hasn’t impacted negatively on every industry there are a few who somehow managed to ride the wave, perhaps unexpectedly. I am talking about none other than our IT outsourcing industry. And slowly and steadily several global companies are found transforming their financial services with the help of emerging technologies at a rapid pace. For example, in the healthcare scenario, collecting and using relevant data, wearables, and VR can assist in making care more accessible whereas the financial sector demands contactless options to accelerate digital adoption. 

Now let us forget about other industries, time to focus on financial businesses can benefit by outsourcing fintech software development.

1. What is the Hype About Fintech Outsourcing & Software Development?

Over the years Fintech or financial technology seems to have played a pivotal role in not just introducing the concept of online payments but making things way easier for both the banking sector as well as their valued customers. If you take a look now, fintech is no longer a mere term but it has become a growing trend – all thanks to the increase in digital payment. 

It may quite interest you to know that over two billion people in the world do not have access to a bank account. However, it is not a new concept, it has been since 1950. The year when ATMs and credit cards made it possible for people to access their finances without visiting the bank branch. And look at the banking and finance sector now, mobile technology, online loans and even cryptocurrency.

Here comes the big question what is fintech development outsourcing? With tech and innovation growing hand-in-hand, startups have no option other than to become increasingly dependent on each other. After all, hiring fintech software developers, product managers, and finance experts can be affordable by only a few startups and not all. As a result, more and more banks have started to look to fintech development outsourcing to access tech talent that can help them compete with young, disruptive fintech companies.

A software outsourcing company can provide developers that focus specifically on mobile, software support, or UI/UX design so the fintech company can concentrate on growing the business. On and all, Financial technology outsourcing is a business strategy employed by fintech companies. Here, a company hires a third-party service provider to handle part of its operations. This helps them reduce the workload for their in-house team, and lets the company focus on core activities. Outsourcing is an especially effective strategy for businesses.

2. Why Need to Choose Outsourcing FinTech Software Development Services for Companies?

Benefits of Outsourcing Fintech Software Development

1. Cost Efficiency

Considering the fact that around 31% of software development has been outsourced and the project outsourcing growth in the upcoming years. By choosing an appropriate fintech app development company, you can choose the right technology to build a feature-rich fintech app for your company and all the business operations can run smoothly. Outsourcing somehow happens to be a cost-effective option and maybe that’s why it is loved by several banks and financial companies.

As a result, companies can save immense overhead expenses including payroll, equipment, and hardware costs and administration costs while developing customized applications. Now have you ever wondered why this is so? Usually when you do not opt for outsourcing a significant increase in cost happens. Come on! Software development is no cookie-cutter; it incorporates several equations, additions, reductions, resulting in continuous change in requirements and business procedures. Thus, the cost also fluctuates. Whereas in outsourcing fintech software, that’s not the case! Outsourcing software development itself being so cost-effective option so even if there are ups and downs, you will find it a more convenient option in comparison to choosing in-house fintech software development companies.

2. Data Analytics – These Moments One Must Milk for! 

The entire finance industry survives on data collection and analytics. By doing this, they have successfully been able to reduce risk when underwriting loans, issuing securities or trading futures. By choosing reliable software development outsourcing partners, fintech organizations can come up with software that enables them to analyze sample customer data. This results in increased sales and promoting customer loyalty. Right from their credit scores to their spending habits, everything is monitored carefully via software just to offer tailored services for each prospect.      

How outsourcing or offshore development services works wonders here? Well, most of the software outsourcing  service providers tend to choose python as their programming language  for the data analytics software so that the financial institutions can not just track accurate information but also ensure security and high-end protection of their valuable data from non-stoppable cyber crimes.

3. Global Reach

Another major advantage for the financial companies offered by outsourcing developers is the insane global reach. Since we are talking about outsourcing, there are pretty fair chances for the technology partner to assist you in promoting your software globally. In simple words, companies open up to a new world and introduce themselves to a new marketplace. 

Also, the change significantly increases the number of the target audience for the business and gives plenty of development opportunities. Hiring an outsourcing  team gives you the chance to improve your international relations and establish a team with expertise working in your domain.

4. Innovative Approach

When nothing works right, turn left! Say, for example, Airbnb or Uber or WeChat services, I am pretty sure you must have read all their success stories, of course, based on technological innovations. In fact, some of these transformed the way we live and work. For example, I have observed that many of us including companies have started using virtual wallet apps to make the financial transition easy and hassle-free.

By outsourcing a team of professionals and their services, companies can even succeed in integrating disruptive yet emerging technologies such as AI, AR, and IoT  all into one single app for improving user experience and bringing automation into the processes. Also, this collaboration can successfully take your business to the next level in no time.

5. Meet Deadlines Right on Time

Since today everything is going fast-paced! So irrespective of your business, I am sure your core objective is to minimize your product’s time-to-market. By outsourcing software development, you can minimize the load of your in-house programmers. 

It doesn’t matter whether you are outsourcing the entire project or just a part, by choosing a software outsourcing company, you can ensure prompt and quality delivery by the deadline guaranteed. Also see whether they are capable of leveraging agile methodologies to speed up the time to market. 

6. Get an Early access to a wide talent pool of developers

It may quite interest you to know that outsourcing companies work day and night towards spending the shortest possible time on any development project that they are working on. This surely means that you will find none-other than an experienced bunch of developers especially those who have mastered all the steps involved.

Most developing countries comprise of developers who strive hard, who have invested so many years of combined pieces of training and hard work which gives them greater understanding of how the system works and with this experience. 

You have numerous options for choosing a professional who will fit your business model more appropriately.

7. Better Time and Data Handling

Last but certainly not least is the best optimization of data and time for the business. An ideal fintech development outsourcing service provider always comprises specialized teams of experts who know exactly what needs to be done to reduce development times and come up with quick, agile results and consistent quality. After all, this is the only way they end up meeting the high-end demand of different organizations. 

Apart from time, security breaches or data exposure has become a severe threat and the most important challenge being faced by many financial executives these days. After all, crucial information like social security numbers or credit/debit card information, salaries, spending habits, house habits, etc are being stored. This will definitely attract a lot of bad guys! Fret not, you can ask your fintech development outsourcing  partner to incorporate cybersecurity defense services. 

After all, it’s high time we must pull up our socks against incredibly increasing cybercrimes. 

Well, I am not biased at all. I can go on and on with the advantages offered by outsourcing fintech software development but that doesn’t mean it does not possess any downsides. The major challenges of Financial technology outsourcing gravitate around overall operational resilience. As a result, they are often chained in a vicious line resulting in damaging the project.

3. The Major Challenges Faced by Fintech Businesses here are:

1. Security

Of course, your offshore tech partner will ensure to offer enough security but what if he fails. I mean having a slight lack of cybersecurity will result in an entire failure. And god forbid if the software is being exploited by a cybercriminal this will cause much more trouble than direct financial damages: business disruption, heavy penalties, lost reputation, and customers.    

2. Tacking Emerging Risks

FinTech companies need to keep up with the technological risks otherwise the segment will end up crashing in the market. Which is indeed a major concern! 

3. High Quality

Lastly, the quality of fintech solutions provided by the software outsourcing  partner is another unseen challenge in itself. I mean to decide whether it’s good, bad or better is critical considering different customer perspectives. Also, failing to comply with regulatory requirements for operational resilience due to the poor quality of a Fintech software solution may have serious consequences.

4. Some Crucial Tips for Outsourcing Software Development

By now you must have understood the fact how software development has become the new normal for us all across the globe. It’s time to take a step further and choose outsourcing. Further, I would like to give some tips for outsourcing software development to help budding businesses. 

1. Clear your business requirements in prior – First and foremost, it is important to decide your work requirement properly for outsourcing a software or app development project. By determining what you need, it will be way simpler to consider the best technologies or methodology to work with, which will best fit your business needs and expectations. 

2. Check different company reviews online – I am sure you will come across a wide range of software development companies that offer outsourcing services. So before you pick one or make a choice just go through their corporate websites, LinkedIn profiles, or any other social media. 

Also do check their genuine reviews on trustworthy websites that gather companies’ information as well as provide authentic reviews from clients.

3. Understanding company culture – Anybody would like to work with an outsourcing company you are comfortable working with. The company culture can have a huge impact on the partnership and the project. After all, this can have a huge effect on how the project evolves considering how your outsourcing partner operates. If god forbid, a certain area of the project contradicts company culture, it may result in resentments and disagreements, and may also impact motivation or desire to work in the project. 

5. Do You Agree that Outsourcing is Meant for Financial Business?

So what to do? Whether to give in or not! Well backing off is not an option especially considering the present times. But what we have in our hands is to play smartly. I mean you will encounter a truckload of good readings about the concept. So before picking a partner ensure that you know everything. Apart from this, try to keep looking for a few common aspects such as their corporate culture or are they well in regards to communication? How is their technical competence? Do they carry any industry expertise? If yes, which clients have they already worked for? Get testimonials, reviews as much as you can?

Also, right from the beginning pay attention to how customer-centric your prospective outsourcing partner is. So that’s all for now! I hope you enjoyed reading the post. Keep watching the space for better perspectives regarding the same.

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Itesh Sharma

Itesh Sharma is core member of Sales Department at TatvaSoft. He has got more than 6 years of experience in handling the task related to Customer Management and Project Management. Apart from his profession he also has keen interest in sharing the insight on different methodologies of software development.

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    1. JASMIN DSOUZA

      It's a great piece of information. Thank you for putting up this article. I must say that outsourcing software development is way more beneficial for fintech business because it's cost-effective, low-security risk, lower time consumption, better time and data handling, help for global reach, high-quality solution, and many more.

    2. Adina

      Since covid-19 has impacted negatively on many industries, but there is an exception. The IT outsourcing industry. These services have turned out as a pure blessing for many indusry verticals such as banking, healthcare, fintech business, etc. Thank you for sharing this information on how the outsourcing industry beneficial for fintech business.

    3. Vihan Sharma

      Absolutely Great piece of article. We know that how technology is effecting our daily lifestyle and the same goes for Financial service industry with the emergence of Fintech. Which is why many financial business is now looking to outsource their fintech requirement to stay ahead in the competition. And because Fintech ecosystem require agile development, hence outsourcing FinTech software development is a good choice.