Fintech had gradually evolved from fancy future technology to an essential part of the finance world we know today. Fintech is getting more and more investment and is in a constant state of development. One thing is undeniable: Fintech is a well-established, fruitful industry, therefore investing in it is a clever action.
Thus, we present a guide on Fintech outsourcing.
What is Outsourcing in FinTech? Why bother?
To increase efficiency, quickly apply promising technologies and satisfy the upcoming demands of the market, many business owners resort to outsourcing.
Outsourcing is a procedure of gaining necessary skills with outside help from third parties: companies, development teams, providers, etc.
With FinTech, the situation is more than complicated, as we’ve seen several large scandals with cryptocurrency thefts and personal data leakage related to the DBs of bitcoin and ethereum wallet owners.
Pros and Cons of Outsourcing
There is always a compromise between using your own staff and delegating some work to the external experts. It’s even more complicated with the Fintech solutions. As you have to collect a powerful and professional team to write the software, which will be very well protected against hacker’s attacks, data leakage, quick, convenient, and stable working at any pick loading.
Such an in-house team is time-consuming to collect and difficult to motivate to do some routine tasks. As experts need to be trained regularly, like athletes, but with complicated projects.
With an unskilled IT team in the early stages of development, you may experience data leaks or security breaches, thus losing your customers’ private data and descending into a long process of governmental penalties.
Quality might likewise drop with the outsourcing company, but choosing the right development team is mostly a matter. And not least – outsourcing might save you a fortune. It seems that the cost is high, but it sounds more attractive compared to the benefits of the job done according to the pre-scheduled deadlines, saving on taxes, seeking lives, vacations, and office routine expenditures. And the responsibility for the data privacy regulations is delegated too.
On the other hand, you obtain properly working software, which can be maintained by your much smaller in-house IT team, and have professional support whenever you need it.
Finally, you can set the business as you planned, conquering the competitors with advanced, professionally created, and well-protected fintech solutions, and gain the customers’ appreciation and trust. Digitalized data will become easier to store, and finance – easier to streamline.
Essential Steps and Useful Tipps
Now that we’ve gone through the basics, we ought to focus on the essentials of applying outsourcing to your Fintech project before you hire a development team.
It all starts with an overview of available development teams. Be particularly careful and meticulous in choosing a development team for your project.
When choosing one, there are things you should be aware of.
• First of all, pay attention to the programming languages they know: whether it’s Python, Haskell, C++,… The team should be agile and always be well-versed in trending programming languages.
• Then, check their reviews, their client history (you may as well contact their clients to assure their satisfaction), their understanding of the industry and the market you are aiming for, their communication skills, etc.
• It would be best if you also didn’t look for an offer way too cheap because poor quality will eventually pop up, and things will need fixing.
• A development team well-versed in business matters, as well as knowledgeable, hard-working, prompt, and communicative, is that one team you should look for – luckily, there are quite a few companies that can offer you that.
• Look at the industry experts, there are not many fintech & blockchain IT professionals on the market. The majority of them are represented on such listing platforms, as Clutch, the Manifest, Techreviewers.
Check out this domain to get acquainted with some development teams with the Fintech portfolio.
Security and Market Standards
As you henceforth take the responsibility to dispose of the finance, you must comply with current security demands of the market, or GDPR (The General Data Protection Regulation). For many, GDPR can be troublesome to put up with, but following it is an essential step for the viability of your enterprise. You can get acquainted with the key points of GDPR here. Your main goal here is to raise awareness throughout the team and analyze the risks.
Complying with GDPR may be a struggle, but if you dedicate enough time to researching and testing (or leave it to the professionals), you should be fine.
Considering the Trends
Following the trends of the industry might be a smart and profitable thing to do. For now, such areas as payment software, digital banking applications, P2P lending, Insurtech, Investment are getting the most finance, therefore are worth investing, or, at the very least, paying attention to. Being aware of trends is still a vital step to understanding the market as it is.
Mobile payments are a trendy branch of Fintech too. Mobile payment systems pretty much skyrocketed over the last few years, implementing mobile banking and P2P payments. That brought quite a change into the market, with Digital Wallets being raised more awareness of, NFC (Near Field Communication) being introduced and widely implemented, and Biometrics stepping in. That said, it is clearly visible how much change Fintech brought and how important it is to understand the market and apply it prudently.
Using Blockchain for your project might be a great idea, or it might be not: it all depends on the specifics. Blockchain can be just as deadly as beneficial. Few things are for sure: Blockchain requires professional execution and might cost you an arm and a leg… On the other hand, Blockchain is a fault-tolerant system that supports the disintegration and shared databases, opening the horizons for competitive advantages.
Insurtech is a field closely related to Fintech, meaning they develop simultaneously. Insurtech sure has its fair share of promising applications. Insurtech seems to handle P2P quite well, as well as support Internet-of-Things (IoT), meaning customer service has become much more adaptable and personalized. Moreover, as the name suggests, Insurtech provides Just-in-Time Insurance.
Banks surely had to experience a digital transformation when Fintech stepped in and stirred up the industry. The influence of digitalization on the global market is undeniable. Thus, banks have to comply with Fintech to stay afloat: you have to make sure your services are digitally supported, otherwise, they might, and most likely will, expire. By applying digital support to your project, you create new opportunities for your business, accelerate innovation, enhance customer service, create new working places, increase funding, etc.
Fintech is an undeniable part of the modern financial world. Thus it should be treated with proper care. Outsourcing is a reliable way to get your Fintech project working; therefore following the aforementioned steps is imperative to thrive and successfully blossom into a competitive Fintech company. If you do your research and approach the question creatively and prudently, you can make the most of your project and profit not only yourself but benefit the Fintech market as a whole.