How Outsourcing Software Development Can Help Fintech Businesses
Updated on Sep 5th, 2022
Outsourcing software development is a smart option, especially for well-established companies for a number of critical reasons. It has brought an option for businesses to achieve their digital transformation goals, and at the same time reducing risks and maintaining the cost-saving approach. But when it comes to the fintech companies, at present, the digital transformation is the only choice for them to survive in this growing world. And even the results have shown that outsourcing is the only way out to drive efficiency and flexibility in Fintech businesses.
By outsourcing IT services, companies can save a lot of time, efforts and money and apart from this it allows the companies to transit their valuable resources to their core business models. In fact, IT outsourcing service providers offer specific business solutions that enable the financial institutions to adjust huge data storage, tech products, workspaces, and more in order to build an efficient IT environment with their tech services.
Outsourcing Software Development
Outsourcing IT services is the new trend that has been gaining popularity in the market as customer behavior is changing due to the advancement in technology. Moreover, investment in financial technology has reached $34 billion in the year 2018. The reason being the technologies such as AI, Mobility, blockchain, is gaining pace and are transforming the way transactions, or customer engagement is carried away in the financial market.
Many financial companies and financial service organizations are turning into offshore software outsourcing to develop custom software or on-demand software solutions while maintaining an in-house development team. The reason behind this is these companies have years of invaluable experience of working with big tech in custom software development. Even the banks are turning to outsource development services in order to have access to the best pool of talent. This is because of the software development talent and low employment rates the big tech software developers are enjoying and which has increased the salaries and given the competitive edge to entire industries.
Outsource software development provides immense benefits such as it shortens the development cycle and enhances the quality of data and analytics in the industries. Let’s read on to learn more about how software outsourcing is transforming fintech and helping companies to grow.
1. Access to in-demand experts
The offshore software outsourcing companies assist the fintech to find the right and best pool of talent suitable for their development needs. There comes no need for financial companies to choose from a big pool as this crucial task will be delegated to outsourcing. Outsourcing companies will not only provide high skilled team guarantee but will also find the best match for the financial projects.
The market presently is candidate-driven. It implies that the competition between the companies is increasing to hire limited and experienced software engineers. Manpower acquisition for fintech industries is even harder because finance has not acquired the goodwill, the tech giants possess. In fact, tech talent crises are now started in the USA, which has begun to influence companies all over the world involving enterprises in Canada and western Europe. This is the main reason that organizations have started collaborating with offshore development companies resulting in neglecting the difficult manpower selection and possessing the right talent.
Most of the companies situated in Latin America and Asia are well acquainted with experienced developers who have the same educational background and experience which their American counterparts have. Developers in Latin America are in demand due to their advanced knowledge and fluency in English with a proper understanding of American technological trends. The business hours of the developers in the mentioned region are as similar as in-house colleagues assuring
- Seamless coordination
- Completion of the project on time
- Rectification of errors
- Support and guidance
- Healthy work environment
So we can say the in-demand expertise is important because it provides
- In-house availability of external talent
- Experience and expertise
2. Faster project completion
It is essential for businesses to manage their time in order to stand out in the competition, as the time and tide wait for none. Financial technology companies are getting in collaboration with offshore software development companies so that they can initiate and finish the project they started in a limited time period too with accuracy.
Fintech companies were engaged in traditional hiring processes to cope up with the needs of their development projects. This includes
- Finding the right candidates by old and traditional methods
- Providing training to the new employees according to the standards of the company
- But the outsourcing companies have a wide range of experienced software developers who can start a project within less time and quick and better understanding
Since the experts hired have years of experience, they assure faster organizational development. They have worked a number of projects giving them the advantage to apply this knowledge to their new projects by shortening the common problems that occur while undertaking the fresh projects. They also have the ability to reduce the project duration.
Thus the team of expertise provided by the outsourcing companies ensures
- Fast development
- High quality
- Reduced workload
- Reduced mistakes
- Elimination of conventional processes
- Increased efficiency
3. Increased profits through data analytics
Investment banks like JPMorgan Chase, Goldman Sachs, etc have experienced specialists who are acquainted even with the minute details and complications in data analytics to reduce the risk involved in underwriting loans. They issue securities or trading futures. The fintech industries thus are experts and play a lead role in the collection analysis of data. The above mentioned financial companies have started to analyze customers to grow their sales and to gain customer loyalty. They use different techniques to examine the creditworthiness of each customer. Some of the techniques are
- Credit scores
- Spending habits
- Demographic data
They also offer tailored services to each associated customer.
Both small financial units and large financial banks are using the joint venture of in-house engineers and offshore development companies to increase their data analysis. These outsourcing companies help the financial institutions to build the software for data analysis of each customer. They also ensure the privacy and confidentiality of the customer data by providing security.
4. Reduced server load through cloud computing
The credit unions, multinational banks, and financial institutions have not been willing to work with cloud computing technology. The basic reason behind this is the information will be exposed to hackers. Putting a question mark in front of confidentiality norms and reducing the goodwill of the organizations. However, there have been improvements in the security sector which have led some of the financial institutions to work with cloud computing.
Cloud computing based solution are being appreciated by the multinational bank to a great extent, because of the following reasons
- Reduction in physical infrastructure
- Reduced costs of servers
- Third-party storage of information
- Through SaaS
- Increased savings
Cloud computing is also by banks to store
- Communication information
- Accounting information
- HR information
- Contact lists and other private information
5. Protection of valuable consumer data
A security breach or data exposure has become the most important challenge, which is being faced by financial executives nowadays. Almost all of us are acquainted with increased cases of security threats. Cybercriminals impose a large portion of their attacks on the financial institutions. They try to attempt data breaches more often than the organizations related to other industries. There is research conducted stating that American financial services undergo one billion attacks per year.
The problem increases because of the financial intuition stores the information like
- Social security number
- Credit and debit card information
- Spending habits
- House habits
Such confidential information when it goes into the wrong hands could result in disaster.Banks, credit unions and financial institutions have now initiated to invest more in their cybersecurity defenses and have started hiring experienced and knowledgeable software security experts on a large scale. However, research conducted found that the banks are preferring to spend on security for every person. The US government has started to levy new norms dictating the financial institutions on how they should secure the data. It has become mandatory for financial institutions of all sizes to increase investments in information privacy and security and to pull up their socks against incredibly increasing cybercrimes.
6. Building partnerships
Good and trusted relationships are the key factor in productivity pursuit. Outsourcing software development has the ability to produce productive partnerships with that of agencies, contract services, etc. by selecting a specialized team that is technologically upgraded with knowledge and experience, fintech can strategize their management skills.
7. Expand business in a structured way
Outsourcing services provides a favorable condition for tech business expansion. The management remains focused on
- Core business operations
- Reduction in costs
- Internal and external quality checks
- Trustworthy relationships
It becomes quite simple to premeditate and implement the tactics for business expansion.
The financial industries have initiated to invest billions of dollars per annum for the evolution of the software that their business wants to survive in the new data-driven era. The organizations are now turning to the outsourcing business for the accomplishment of the cited objective without getting distracted from there other fundamental missions.
These offshore development companies support the banks in the development of well-crafted software eliminating unnecessary in-house engineering. They also help the organizations to start the project more quickly and ensure the overall organizational development in a limited time. Thus, we can say that the offshore developers are proving to be good supporters as they are
- Improving data quality
- Offering a variety of targeted services
- Enhancing banking operations
- Helping to increase quality in investments
- Time management
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