Why Fintech Companies Should Outsource Their Tech Needs?

Fintech is a greatly fruitful modern business niche that allows companies to provide regular services with lower fees through innovations. The budget of most fintech startups, however, can rarely be moderate (which, in the long run, goes for the substantial development of any software solution). 

That tendency makes startup and business owners look for budget-saving shortcuts, which, increasingly often, leads them to the outsource of fintech development. Let’s take a look at the main advantages of taking that cost-efficient yet productive route. 

Why Does Outsourcing Thrive in the Fintech Industry?

Similarly to all other types of IT outsourcing, fintech development outsourcing brings many benefits for profiled companies’ clients, some of which include:

  • cost-efficient access to advanced tech & new resources;
  • optimization of IT processes without  additional investments;
  • reduced software development costs;
  • decreased in-house staff workload;
  • an ability to save the organization’s additional workspaces;
  • fast adaptability to the particular niche’s development requirements.

How Can Fintech Help With Outsourcing Restraints

Many development companies may be restricted to some extent not only in terms of budget but also in other important resources, like time, the scope of qualified employees, as well as the available working space.  

Hiring separate full-time employees to cover as many areas as possible means loads of new taxes, organization of workspace or even new office rent. New people involved with long-existing workflows can also bring many ‘readjustment’ complications. 

The way of outsourcing in the fintech industry can be a real game-changer for many companies that need to deploy some custom software in the shortest terms without sacrificing either huge chunks of the budget or the level of end-product quality. 

Technologies That a Fintech Provider Can Outsource

The most common reason for an IT company to go for the outsourced developers’ services isn’t all about saving money, though, The need mostly appears when there is a lack of local experts with a sufficient level of expertise. 

Thus, literally a couple of years ago, it was a real issue to find skillful blockchain developers in many countries (the shortage of blockchain experts still remains a minor problem in some parts of the world). 

So, if you plan to create a product inspired by the latest technological trends, the best way would be to employ fintech startup outsources services vendor. 

 As a rule, such companies have vast expertise in the targeted technological domains. That way, you’ll be able to employ some of the best developers in the niche without restrictions and quite affordably.

Pros & Cons of Fintech Outsourcing

Pros:

  • easily controlled workflow & business goals. All the managing responsibilities are taken up by your contractors. The desired results in terms of developing, deploying, and further technical support of your software are achieved with external efforts with a minimum participation of in-house specialists;
  • plenty of competent experts. Outsource developers are always qualified experts of their niche, easily handling tasks of any complexity in a certain field; 
  • workflow resource-efficiency. Certain business processes are passed down to your outsource partner to handle along with all the involved efforts, letting your company focus on other crucial aspects; 
  • cost-efficiency. The smaller staff you have at command, the least expenses you need to handle. It is that simple in this aspect;
  • growth of the main in-house domain’s efficiency. Outsourcing allows companies to get rid of the necessity to handle functions, in which they don’t specialize directly. That way, they can concentrate on enhancing their main focus of expertise;
  • absence of staff management expenses. Outsource companies pick and train the staff for handling certain tasks on their side. You can rest assured that all business processes are solved by specialized experts;
  • no arguments & disputes with staff. Hired specialists can only express their dissatisfaction with some or another thing within their own working environment;
  • professional relationships reinforced with a contract. Outsourcing partnership between a contractor and a client is always backed by a contract. The signed agreement mentions all the responsibilities and rights of both sides, as well as other important cooperation nuances;
  • payment upon results. Your in-house employees may always get a chance to waste some time acting busy, that’s a common working ‘sin’. This is never a case with outsourced experts, however, who get paid only upon the final results of work.  

Cons:

  • risks of insufficient quality. Everybody claims to be a real professional in their field of work while the real quality of their performance can only be witnessed and assessed when the project is finished. Pay attention if your project assumes the introduction of highly advanced technologies, such as fintech big data outsourcing, for instance;
  • risks of incompatibility with your corporate style. An outsourcing contractor does their job according to all the common standards. Any corporate specifics, however, must be thoroughly explained or even interpreted to your partners;
  • data leak risks. Data privacy terms are specified in the contract and are legally approved. At some point, there always will be risks of some in-house information leakage;
  • dependency on third-party contractors. If an outsourced contractor doesn’t handle the task well in the end, you automatically come to endure the unnecessary expenses;
  • no end-to-end control over the software development process. The software building by the third-party personnel cannot be monitored throughout each stage of the process; 
  • staffing risks in an outsourcing company. In some rare cases, outsourcing vendor may have internal staffing issues. This can even lead to stalling the progress on your project and cause other problems.

 

Fintech Outsourcing – Risk or Priority?

As you can see, there are notable benefits you can reap from going for outsourcing as well as some potential risks you need to consider when making this step.

Look closely not only at your future contractors but at all possible issues and extra expenses that may appear due to them not handling all their responsibilities well enough. 

Outsourcing vs In-Sourcing – Value

When you choose outsourcing, keep in mind that all the mentioned above risks are the only potential. The benefits are always there, however – they’re the essential part of this business cooperation model. Perhaps, this is why many European companies have been increasingly employing outsourcing to solve particular business issues. 

Thus, your outsourcing contractor takes up the responsibilities you would’ve otherwise assigned to your in-house department. Initially possessing high expertise in the field, the contractor would implement your project with a sufficient level of quality, in accordance with all the industry standards while claiming fewer expenses as opposed to all the corporate organization affairs you might need to handle. 

There are still potential risks related to outsourcing in fintech, but you can avoid all of them if you find a reliable partner. 

Examples of Fintech Outsourcing

Let’s take a look at the following two successful cases of fintech startups implemented by our team of experts in terms of providing a complex of high-quality services. 

Planet of Finance

planet of finance - binariks portfolio

This app is, in fact, a whole platform for investors striving to conduct financial operations as conscientiously as possible. In particular, it provides investment pro tips by experienced market players and helps to find projects with big growth potential to invest in. 

 

Pylink

pylink - binariks portfolio

Pylink is a British startup that is, in its core, a web application for creating and storing financial models of structured financial products with the version management capabilities. Pylink users are experienced analysts (experts at rating agencies, investment banks, investment funds, etc.) that possess a deep understanding of structured financing.  

What Negative Experiences Can Arise? Who is Wrong? Business or Contractor?

Negative experience during partnering up with an outsourcing contractor can arise due to most various factors – from selecting an unreliable partner to work with (‘I checked some reviews on their official website, they must be good’, ‘their website looked pretty well so I chose them’, etc.) to the insufficiently clear explanation of your requirements (‘didn’t have time to specify this or that’, ‘the requirements were changed half-way’, etc.). 

In any case, these experiences are followed by your expenses and there’s no sense in choosing sides here. The only thing you can do to protect yourself from possible risks is looking for a contractor via a resource that guarantees the high qualification of all involved users (like Upwork). Or, you can at least work with partners by the post-payment principle. 

Fintech Outsourcing Trends

 

According to the report by CBInsights, in 2019, we can highlight the whole ten hot fintech trends, such as:

  • blockchain & cryptocurrency;
  • personal banking;
  • online payments processing;
  • technical insurance innovations (Insurtech);
  • financial commerce;
  • international financial transactions;
  • digitalization of commerce & real estate solutions;
  • eCommerce solutions (particularly, marketplaces);
  • evaluation of companies’ financial risks (Regtech);
  • investments & wealth management.

Following at least one trend from the bunch will help you target leading market positions while helping financial companies solve long-standing business issues.

Tips on How to Choose a Fintech Outsourcing Solution

Last but not least, take a look at some pro recommendations to help you find a truly reliable outsourced software developers.

Choose a partner, not a vendor

Software vendors are mostly interested in providing multipurpose products that would fit the wider scope of possible users. In turn, a partner will create for you a solution adapted to your particular business needs and support it throughout the whole product lifecycle. They will also take up the responsibilities for scaling and changing an existing product according to the changing industry standards. Thus, search for outsourcing fintech companies that are ready and willing to establish a full-blown contract. 

Insist on defining services & levels of performance

The more specific your future product requirements are, the better results you can expect from a hired outsourcing team. You should also keep in mind the fact that no matter what efficient means of remote communication we have at disposal nowadays, you’ll still need to somehow interact directly with your contractor from time to time. Try to define your tiniest requirements in detailі from the get-go, preferably in person, to avoid any risky changes ‘on the go’. 

Choose a partner with experience in fintech outsourcing

There are numerous companies specializing in ‘literally everything’. Unfortunately, it’s the narrow focus that allows providers to truly excel at what they do. Try to work with experts that focus on your business niche in particular (or those that have separate fintech departments). 

Be completely forthcoming

If you plan to establish transparent, long-term business relationships with your partner, stay utterly honest in terms of the project budget. There are situations when companies look to implement some highly-expensive functionality and bit more than they can chew, having to sacrifice other important features. If you talk over all the nuances initially, you can save yourself from unexpected situations that can affect the end product quite negatively. 

Choose someone you can trust

Software creation is a long-term process. You cannot set up any important long-term processes with someone you can’t trust. Try seeking some real feedback online to reduce dishonesty risks.

Conclusion – How Binariks Can Help You in Fintech Outsourcing

In 9 cases out of 10, outsourcing is a single most optimal way to implement some fintech software in a company with a limited budget and/or access to only local labor resources. On the other hand, you must be utterly wary when choosing a company to help realize your business concept. Otherwise, you’ll simply waste time, money, and don’t get the desired viable product. 

Go only for well tried-and-tested financial technology partners, such as Binariks. We have been providing reliable, scalable, simple in maintenance, and competitive custom software solutions at reasonable costs for foreign clients for years. Contact our managers right now to find out the approximate costs of our fintech outsourcing services in terms of your particular project and see what we are capable of for yourself.