FinTech companies are frequently told that they must develop all of their technology in-house. On the surface, this seems reasonable. As a startup, you want to be in charge of everything technology and are wary of allowing outsourced suppliers to touch your beautiful code or share your revolutionary ideas. In truth, FinTech firms suffer from the trend of keeping technological efforts in-house.
In today’s world of technological advancements, it just does not make financial sense to create most financial technology from the ground up, reinventing the wheel. FinTech firms benefit from outsourcing their technology since it is less expensive, quicker, and more dependable. Several pre-made white label software on the market today are simple to license on a pay-as-you-go basis. FinTech firms can utilize this outsourced technology as building bricks, rearranging the components to develop their own unique products and services. This saves time and effort for fledgling businesses, allowing them to concentrate on user acquisition and company development.
Within the FinTech business, people are starting to notice. According to the PwC Global Fintech Report 2017, as much as 20% of all FinTech firms outsource their technology needs. Furthermore, as much as 65 percent of the FinTech sector predicts that outsourcing would be used in the near future. Finally, Deloitte Global recently released a study stating that there are a plethora of reasons why a FinTech company should collaborate with third-party technology providers. The following are the three most pressing reasons:
The basic line is that outsourcing technology is less expensive than creating it internally. Consider all of the costs associated with operating a tech team: Salary and fringe benefits, More computers and other devices Additional office space Fees for administration and management have risen. That’s not even taking into account the additional expenses of changing infrastructure and business operations.
This is why using white label software instead of building one with an internal team saves a FinTech firm 35% of the time and money, the same way as it happens in the case of the forex industry where the number of white label Forex providers is increasing on a daily basis, which also directly increases the cost-effectiveness. According to Deloitte, 59 percent of firms outsource technology largely to save costs. You may not be able to locate one that has all of the features you want right out of the box, but most of them are already available and may be reused or realigned to better suit your needs.
Faster Marketing Time
Third-party technology businesses, on the other hand, frequently have more specialized personnel and higher knowledge. When compared to creating technology in-house, this helps software outsourcing businesses to use best practices and thereby reduce time to market. A specialist outsourced technology firm is likely to have high-quality pre-built software components like Libraries devoted to certain industries, Frameworks for pre-built APIs.
Developers in the FinTech outsourcing industry are frequently trained to grasp, for example, online stock trading language and reasoning, or accounting words and math. FinTech companies benefit from having access to such a specialist workforce since it reduces the time it takes to create and launch. According to Deloitte, outsourcing technology may reduce the time it takes for a product to reach the market by up to 21%.
In the startup world, scalability and flexibility are essential. FinTech startups have it when they outsource. You don’t need to recruit more staff to try out a new framework; instead, you may use on-demand resources such as designers and UI/UX specialists, which you wouldn’t typically require as a full-time employee, at least in the early stages of a business.
FinTech firms may rapidly scale up and down in order to fulfill a key deadline. With a full-time workforce, this isn’t always the case. As a result, up to 20% of outsourced technology businesses are being leveraged to offer new capabilities.
Quality and Reliability
Working with an outsourced technology business has the advantage of increasing the quality of your product while also increasing its speed and flexibility. In reality, you pay less and receive more. Naturally, if you choose the proper technological partner. For years, several FinTech outsourcing firms have created award-winning financial apps and software modules. They’ve finished hundreds of projects that have been utilized by millions of people. Proven knowledge and dependability are priceless assets, and achieving the same level of quality would take years and millions of dollars for a startup.
Furthermore, the best software providers offer customer assistance 24 hours a day, seven days a week, and a free guarantee if any problems are discovered. This aids FinTech firms in reducing risks and improving user experiences (UX) by up to 38%. Outsourcing technology can be hard, but if you choose the appropriate partner and keep the aforementioned factors in mind, you can get closer to your goals faster. Instead of creating everything from scratch, successful FinTech firms outsource the majority of their technology.
Furthermore, FinTech firms that employ outsourced technology firms will be able to quickly adapt and evolve in response to changing market conditions, allowing them to stay ahead of the competition. Adaption and evolution are the keys to success in an industry rife with disruptive and creative technologies.