Fintech is a thriving modern business sector that allows organizations to offer regular services at cheaper costs by leveraging technological advancements. Most fintech firms’ budgets, on the other hand, are rarely moderate. This propensity pushes startups and business owners to look for cost-cutting measures, which increasingly leads them to outsource fintech development.
According to the PwC Global Fintech Report, as much as 20 percent of all FinTech businesses outsource their technology needs. Furthermore, as much as 65 percent of the FinTech industry anticipates that outsourcing will be used in the near future.
As one of the fastest expanding and continually shapeshifting marketplace, Fintech firms might sometimes struggle to stay up with how to target a client with a niche product in an ever-changing digital marketplace. As a result, outsourcing is recommended. Outsourcing is becoming more common in businesses of all sizes and across industries. The pandemic has accelerated this increase, as well as the evolution of development provider needs. Despite the complexity of financial services, firms continue to outsource fintech. Let’s take a look at the primary benefits of selecting that less expensive but more productive option.
Cost Effectiveness
Outsourcing technology is less expensive than developing it in-house. This is why getting a white label software instead of building one with an internal team saves a FinTech business 35 percent of the time and money. According to Deloitte, 59 percent of organizations outsource technology vastly to reduce costs. Reduced delivery costs were cited 44 percent of the time when inquired on how innovation adds value to outsourcing relationships.
Improved Flexibility
In the startup industry, scalability and flexibility are crucial. FinTech startups have it when they outsource. FinTech businesses can rapidly scale up and down to fulfill a key milestone. With a full-time crew, this isn’t always the case. As an outcome, up to 20 percent of outsourced technology companies are being employed to deliver new capabilities.
Outsourcing provides FinTech firms with a lot of flexibility and scalability, including:
- Ability to effortlessly scale up or down delivery teams to achieve crucial milestones.
- It eliminates the necessity to hire more staff to test out new frameworks or concepts. Your outsourcing partner will do that for you.
- Improved budget flexibility to accommodate evolving priorities.
- There will be no long-term commitments to in-house personnel who may not be a good fit.
- The risk of bad fit is mitigated, as you have professionals with experience in collaboration and communication.Rapid Speed to Market
When it comes to FinTech businesses, timing is crucial. You can’t afford to allow your competitors to beat you in the market. Therefore you must build, execute, and boost innovation than they do. FinTechs that have been successful have turned into execution machines that provide innovative products quickly.
Outsourced technology organizations have a higher level of knowledge and specialized staff. FinTech businesses benefit from having access to such a specialized workforce since it reduces the time taken to create and launch. According to Deloitte, outsourcing technology can reduce the time it takes for a product to reach the market by up to 21 percent.
Enhanced Quality
Working with an outsourced technology company has the benefit of increasing the quality of your product while also boosting its speed and flexibility. You actually pay less and get more for your money. Instead of developing everything from scratch, successful FinTech businesses outsource the majority of their technology.
The premier software vendors offer 24 /7 customer service and a free guarantee if any defects are discovered. This aids FinTech firms in reducing risks and improving user experiences (UX) by up to 38 percent.
With outsourcing, FinTech firms can quickly adapt in response to the evolving landscape, allowing them to stay ahead of the competition.
Creating the Best Innovative Products
The FinTech industry is all about innovation. Fintech companies deliver highly relevant services to various market segments by utilizing innovative technological and cost-effective methodologies. FinTech businesses rethink and modernize financial services by leveraging both existing and emerging technologies.
According to a report by Deloitte, as firms innovate, the number of organizations shifting services to outside providers increased from 20 percent to 49 percent.
The hurdle to profitability is removed by outsourcing, allowing FinTech businesses to:
- Employ skilled professionals for as long as they are required.
- Choose the FinTech expertise and intellectual capital that the firm requires to experience success.
Wrapping Up
Long-term success can rely on choosing the right outsourcing partner. Outsourcing is the most cost-effective option to integrate fintech software in a company with a restricted budget and limited labor resources. Large Fintech firms will adopt outsourcing to save costs and increase productivity. Fintech businesses that collaborate with outsourcing partners can provide customers with more engaging products and services.
