5 Tips For Fintech Development Outsourcing in the Right Way
by Sumona Business Development 08 April 2022
Businesses are always looking for ways to save money, and one way to do that is by outsourcing specific tasks. When it comes to fintech development, many businesses choose to outsource to save time and money.
However, not all outsourcing companies are created equal. Follow these five tips to ensure you’re getting the most out of your fintech development outsourcing.
What Is Development Outsourcing?
Due to the consistent rise of the Fintech market, there has been an increase in development outsourcing companies that offer their services. Development outsourcing is the contracting out of specific parts or stages of software production to third-party providers.
The practice became popular in the 1990s, and it has continued to grow in popularity as businesses look for ways to cut costs and improve efficiency to maintain their competitive edge.
Many different types of companies, including fintech companies, can benefit from development outsourcing. Truthfully, about 20% of all Fintech businesses outsource their technological needs.
Why Is The Need For Fintech Development Outsourcing Increasing?
The need for Fintech outsourcing development is increasing because the demand for fintech products and services is growing at an exponential rate. The lack of qualified fintech developers also contributes to the increased demand for outsourcing services.
The tech talent shortage shows no slowing down as 900,000 unfilled positions will expand to 1.2 million within five years. Outsourcing companies can meet this demand by providing a wide range of services, including:
- Application development
- Systems integration
- Data analysis
- Process consulting
- User experience design
With a high level of competition in the Fintech development market, banking and other financial institutions prioritize being faster than the competition. Outsourcing companies can help these institutions hit their desired timelines and budgets without sacrificing quality or innovation.
Therefore, it should be no surprise that Fintech startups are tapping into the potential of development outsourcing to get a piece of the billion-dollar pie. However, with an increasing number of fintech project start-ups, working with an outsourced fintech development team has advantages and disadvantages.
The Benefits of Fintech Development Outsourcing
According to the 2020 Deloitte Global Outsourcing Survey, about 70% of fintech startups say that cost reduction is why they outsource their work. In addition, there are several benefits to outsourcing fintech development, which include:
1. Cost savings –
By outsourcing development work to a third-party provider, you can save money on salaries, benefits, and office space. Fintech startups save on multiple levels, especially when hiring and maintaining an in-house team of experts. Also, there won’t be any recruitment expenses, taxes, training, or onboarding costs, and no operational costs related to fintech development.
2. Access to expert talent –
Outsourcing companies have a team of experts who can help you get your project done quickly and efficiently. Developing fintech solutions requires industry experts to have a firm handle on fintech app standards. If you do not have a team capable of meeting the minimum requirements for influential fintech, consider outsourcing the project. In short, outsourcing gives companies access to in-demand, expensive experts that wouldn’t be possible otherwise.
3. Ensures Quality –
When it comes to fintech development, quality is critical. By outsourcing your project to an experienced team of developers, you can rest in knowing that the developers will complete the project on time and within budget.
In addition, premium vendors will offer 24/7 support when and if issues come up. Outsourcing also reduces the risk to fintech companies and improves UX by 38 percent.
4. Increased flexibility –
Outsourcing companies can scale their team up or down to meet your needs. This is particularly helpful to fintech start-up companies that outsource their projects. In addition, outsourcing keeps companies from hiring staff to test frameworks or new concepts.
Instead, companies will be able to accommodate an evolving vision—better communication and collaboration between professionals with high experience levels.
5. Higher Security Capabilities –
Security is a core concern for fintech software development. An insecure platform is dangerous and increases the risk of service disruptions and sensitive information leaks. Through fintech outsourcing development efforts, companies can rely on the air-tight security of industry professionals. In addition, developers can implement OWASP (Open Web Application Security Project).
The Disadvantages of Fintech Development Outsourcing
While there are several benefits to outsourcing fintech development, it’s important to remember a few disadvantages. These disadvantages include:
- Communication and cultural barriers – When working with an outsourced team, it’s essential to make sure that the team understands your company’s culture and mission. If there is a language barrier or cultural misunderstanding, it can delay project completion.
- Transparency – it can be challenging to track the project’s progress or get updates on development. A common complaint is that companies can’t tune into where the outsourcing software developer is with the process of their approach to the project itself.
With the right partner, you can overcome these disadvantages and enjoy all of the benefits that outsourcing fintech development offers.
5 Helpful Tips For Fintech Development Outsourcing
The benefits of outsourcing fintech software development are clear, but it can be challenging to know where to start. Here are five tips to help you find the right outsourcing partner and make the most of your fintech development project.
Tip #01: Do Your Research/Risk Assessment –
It’s essential to take the time to research different outsourcing companies before making a decision. Assess all potential software risks like financial loss, sensitive data, compliance factors, and any other vulnerabilities before establishing a high level of trust.
Tip #02: Set Clear Expectations –
Make sure that you and your outsourcing partner are clear on what is expected of each other. This will help to avoid any misunderstandings down the road.
TIP #03: Establish a Communication Plan –
Establish a communication plan early to ensure efficient communication between your company and the outsourcing team.
TIP #04: Require a Security Audit –
Make sure that the outsourcing company you choose has a robust security protocol. Ensure that they are willing to comply with your security standards or suggest better ones.
Tip #05: Interview Potential Partners –
It’s important to interview them once you’ve narrowed down your list of potential partners. Ask questions about their experience in the fintech industry, their approach to project management, and their security protocols.
Wrap It Up
Fintech companies are using new and innovative technologies to change how we bank, invest, and pay for things. As a result, the fintech industry is growing rapidly, and there is a lot of competition to adopt the latest and most remarkable technologies.
Our team at Madappgang is proud to offer our fintech development services. Throughout our been building software for the fintech industry for over a decade, we understand the importance of trust-based partnerships. In addition, we are dedicated to providing our clients with the highest level of service.
If you’re interested in outsourcing, we have a team of experienced developers passionate about helping companies adopt the latest technologies and grow their businesses. If you’re interested in learning more, please contact us today.