The saying “You need to spend money to make money” will never be more relevant than it is for the fintech industry. Thanks to modern fintech development, financial institutions improve their services and performance, directly raising their profits. Granted, this only applies when the development is done right and focuses on quality software creation.
With the market forecast to rise by $277.22 billion, you need to look at ways to give your business an edge over the competition. Conquering a larger part of this crowded market will require high-quality development, but you don’t necessarily need to hire a whole department. Instead, smart business owners opt for fintech software outsourcing.
In this guide, we’ll show why outsourcing is a financially sound decision as well as explain its benefits. Using DigitalSuits’ experience as a software development company, we’ll give tips on picking and managing the outsourced team. And, in the spirit of fintech, we’ll talk about mitigating risks for the project. Let’s take a deep dive and learn all about fintech outsourcing.
Why outsource fintech software development?
It’s clear that the real question here is, “What are the benefits of outsourcing FinTech software development?”. As a business, you need to think of the most cost-efficient way to solve challenges, so here are the advantages that outsourcing can give you:
- Lower cost of fintech development
- Easier to scale scope
- Highly specialized experts
- Ability to prioritize core processes
This is quite a straightforward point, as hiring developers through outsourcing is a money-saver pretty much 100% of the time. For one, you’ll be eschewing the costs associated with hiring, onboarding, and maintaining a software team directly. In addition to that, outsourced developers are traditionally hired from lower-priced regions in the world, cutting the cost of their rates.
You’ll also be saving on office space and other costs associated with the traditional development model. A fintech software development company will usually be working remotely as well as providing its own project management. From your side, you’ll only need a point person to communicate with the developers and oversee their progress.
As time passes, you may decide that the project needs extra functionality or requires post-launch expansion. With an in-house team, you’d need to renegotiate responsibilities or hire extra people, taking on further expenses. In contrast, financial software outsourcing allows you to add or remove team members easily, with the only additional cost coming from the devs’ rates.
An outsourcing agency makes it easier to get experts focusing on the software’s design or security. With this, you can adapt to new ideas and directions, as well as adjust the team’s composition based on how the project is going.
Worldwide pool of experts
Instead of focusing your search on developers in your region, you can cast a much wider net when it comes to outsourcing. The team you pick might be based half the world away or close by; what matters most is that you don’t have a limitation when choosing it. If you seek security experts, you’ll be able to pick candidates from anywhere, opening up opportunities to find the best.
It’s no secret that certain technologies are more in demand while others remain niche. So, what do you do if your project requires that niche technology? It helps to choose from the worldwide pool of talent, making it easier to find someone with years of experience. Couple that with the fact that their hourly rates may be lower than you’re used to, and you have a hidden gem.
Stay focused on the business
A big advantage of fintech development outsourcing is the ability to be hands-off with the project. While the team works on your software, you can focus the in-house staff on more pressing matters. There won’t be any need to divert your core team’s attention from the ongoing tasks, as the software will be fully covered by the outsourced developers.
This means you won’t experience any disruptions to your regular operations, even as your business receives improvements through the new software. By delegating the work to an outsourced team, you’re effectively extending the company’s workforce without sacrificing anything.
Of course, this only applies when you collaborate with real experts. How to find the best team for the job? Read on for our tips.
Choosing the right fintech outsourcing partner
As you start your search to hire fintech developers, you’ll need to keep a few factors in mind. These are straightforward and should be standard practice, regardless of the specifics of your project.
Don’t chase prices
With the ability to pick a team from anywhere in the world, you’ll see many lucrative offers. Some companies in India will provide you with an entire department of people for the price of one US-based developer. But, as you might guess, that is definitely not a sign of quality.
While regional differences affect prices, a good specialist knows their worth. So, when outsourcing fintech, aim for a solid mid-range in prices, at least initially. This will help you establish a benchmark to measure candidates and see if their rates are reasonable.
Anyone can claim to be a master of a particular technology and suggest they have the experience for the job. Instead of assuming that’s true, always follow up with questions. Seek out the company’s case studies and check if they’re confirmed and the previous clients are happy.
Don’t be shy about asking questions that go beyond the basics. Bring up old cases of theirs and ask if they’d change anything about your project plan. “What is FinTech software development?” won’t get you a very informative answer. But asking something like “How would you deal with this challenge in our project?” will let you know if you’re on the same page with the team.
Sometimes, a veteran team might look good but end up a poor choice. It’s essential to measure their expertise in terms of your own needs. A team that has only worked with large enterprises might not fit in with a small business. Similarly, an agency that’s only recently started to focus on fintech could struggle with a complex software project.
This is individual, and some teams may surprise you with their prowess. But it’s still a good idea to contextualize the experience. If only to make sure you’re going to get exactly what you pay for.
Interview for compatibility
All too often, companies make a choice based solely on hard data. However, when you pick a partner, you also need to consider their personal qualities. Talk to the team before you make a commitment. You need to see if they’re a cultural fit for you and if the internal dynamic is healthy and structured. Basically, see if these people are the ones you want to work with.
Managing the outsourcing process
Once you’ve chosen your software outsourcing fintech team, work can begin. But to make the most of your collaboration, you need to manage it effectively. Let’s talk about what that entails.
Set clear goals
While the team can follow the project plan, it’s best to go the extra mile and provide short-term goals. Let the developers know what you want prioritized, so they can work toward it. Discuss how you’ll measure their performance and what qualifies as successful. You want to establish an atmosphere of mutual understanding where the staff doesn’t need to guess your needs.
Establish communication standards
You already know what form of internal communication is convenient for you, so try to establish similarly comfortable standards for the team. Define when check-ins should happen and in what format. Suggest a specific structure for their reports and confirm that your tools of choice would work for them. Basically, make sure that you’re on the same page in all business matters.
This doesn’t just mean asking your team whether they’re happy with your leadership. Try to listen to their thoughts on the project, as their suggestions could prove to be quite valuable. While it’s still your decision to make, the developers will often provide smart input that could boost the software’s quality.
Do not micromanage
Working with a team that you don’t see in person often leads to a temptation to micromanage. After all, they’re a new set of employees, they have their own processes, and there’s a lot of unknown factors there. But all this will do is make the devs think you don’t trust them, waste your time, and stall the project.
Instead of trying to trace every single step they take, focus on the larger picture. Track the developers’ performance, praise those who do well, and try to preemptively help those who lag behind. Consider how you manage your in-house staff and apply the same philosophy to the outsource team.
Mitigating risks and ensuring security
Due to its nature, fintech development has some unique risks and challenges associated with it. Navigating these with an outsourced team isn’t much different from doing the same with in-house staff. It is, however, still an important part of the work, so we’ll address these complications in this section.
Whatever your jurisdiction is, there are numerous regulations concerning fintech activities there. That’s just a constant fact, regardless of location, as financial matters are always a tricky business. What this means for your work with an outsourcing company is that the team needs to be well-versed in your particular regulations and follow them.
There is no room to work around this, legal compliance is essential, and the team must clearly explain how they will address local laws and follow them. This is all standard procedure, and any experienced team will help you work this one out.
This ties into the legal compliance side of the work, as properly securing any data processed by the software is typically a requirement. Discuss what encryption methods will be used and how data will be stored with the team. Oftentimes, their expertise can help you secure data better, which should always be the goal in financial software outsourcing.
Working with an outsourced team implies a certain level of information sharing, which can be particularly sensitive when it comes to fintech. This is traditionally solved with a solid NDA that both sides agree to and sign before any work is done.
We obviously don’t recommend working with any company that declines to sign an NDA, as it’s a guarantee that your project details will stay private. Negotiating on its terms is fine, as the contract should be fair and acceptable to both you and the team. But the outcome of these negotiations should always include a tight NDA and an agreement with all necessary stipulations.
Risk assessment and management
The main risks here are caused by some breakdown in communication. This can be a result of cultural differences, a lack of involvement on the client’s side, or inexperience on the team’s side. Regardless of the cause, these issues must be addressed as they arise in a delicate manner. Resolving conflicts is far easier than dealing with their fallout.
As for tangible risks revolving around security and quality, the former should be dealt with through NDAs and compliance discussions. The latter is all about picking the right partner and creating the right conditions for them to thrive. You minimize the risks by planning ahead and making wise decisions, simple as that.
Case studies and success stories
We’ll show you a couple of examples of successful outsourced projects using cases from DigitalSuits. One such story is a cloud automation solution we created for a UK law firm. The company needed a solution to streamline data collection and processing. Our team created two modern platforms: for lawyers to administer and inspect properties and for clients to manage their accounts and documents.
Another successful case featured a data tracking solution for Shopify. This is an example of our team dealing with compliance, as the plugin we developed had to be GDPR-compliant. While the plugin tracked all the necessary data and analyzed it, we also made sure to give an erase option. This was in line with the EU regulations.
With all the information we’ve covered, you should now see the benefits of fintech outsourcing and know what to look for in the process. From picking the right team to work with to managing their processes, the intricacies of outsourcing collaborations are plentiful. This includes particularly crucial areas like navigating NDAs and focusing on legal compliance.
Thankfully, these challenges can be solved with a structured and level-headed approach. Meanwhile, attractive pricing, efficient development, and easy course adjustment will always be present as strong incentives to use outsourced staff. DigitalSuits is a big proponent of the outsourcing model as it’s an effective way to create custom software using true experts.
If you have a fintech project in mind and need a team of specialists to bring it to life, you don’t need to look too far. With 8+ years on the market and plenty of experience, DigitalSuits can tackle any task you set before us. We offer in-depth consultations to help you get started, and our team of developers will see your project from start to finish.
So, to make sure you’re putting your software in capable hands with a focus on security and quality, choose DigitalSuits. Contact us now to get started.