Currently, going digital is the only way for financial institutions to survive in the growing world. Results have also shown that outsourcing software development is the only way to drive efficiency and flexibility in Fintech companies.
By outsourcing IT services, companies can save a lot of time and money. Moreover, it enables the companies to transit their valuable resources to their core business model.
In fact, IT outsourcing service providers offer specific solutions that allow financial institutions to adjust huge data storage, tech products, workspaces, and more to develop an efficient IT environment with their tech services.
Outsourcing Software Development
A new trend of outsourcing IT services is gaining pace within the market as customer behavior is changing and the technology is gaining advancement.
It has been surveyed that investment in financial technology has reached $34 billion in the year 2018. It is because technologies like AI, mobility, blockchain, and cloud computing is rising and are revolutionizing the way transactions, data, and customer engagement are carried in the financial market.
Most of the financial companies are turning towards offshore development centers in India to build custom or on-demand software solutions. And it is a sure-shot way to create successful digital products.
Read below to know how offshore development teams are helping emerging FinTech companies in shaping their future.
Why FinTech Companies are Outsourcing Software Development Projects?
In this section, we are listing three main reasons why FinTech organizations are outsourcing their software development needs.
This is not a new reason to list. But, indeed, this is one of the most important factors for any business. Hiring offshore developers is way cheaper than recruiting a line of developers in-house.
Fact: An average South Asian country like India, has an average wage which is 6-7 times as low as that of an American organization. Additionally, you will be avoiding any hidden costs, infrastructural cost, insurances, and more. In short, hiring an offshore team is a pocket-friendly option.
2. Global Reach
Working with offshore development teams is the greatest thing for a financial company. As it helps the brand open up to a new world and introduce themselves to a new marketplace.
In addition to this, the change significantly increases the number of the target audience and gives plenty of development opportunities. Hiring an offshore team gives you the chance to improve your international relations and establish a team with expertise working in your domain.
Hiring experienced remote developers gives you an option to avoid unnecessary errors in your development process. When you become a partner with an IT outsourcing company, you get a ready and already functioning team with a high level of professional expertise that has worked on a variety of verticals and delivered top-notch successful products.
Therefore, the outsourcing development centers specialize in web and mobile development, as well as product design and development, R&D and consulting.
Major Challenges faced by the FinTech Industries
1. Data Privacy: The FinTech industry is struggling with data security and privacy issues. As data security is a major aspect of the financial world, technologies are emerging to create innovative solutions to deal with consumer’s data. In fact, companies providing Fintech solutions are adapting trending technologies to ensure that data is secure.
2. Tacking Emerging Risks: FinTech companies need to keep up with the technological risks otherwise the segment will end-up crashed in the market
3. Stability: Even though FinTech companies have created a diverse ecosystem, it has increased new systemic risks by launching disruptive business models.
4. Funding Problems: Many smaller FinTech startups are lacking access to early-stage capital, inhibiting their potential to scale up with the technological industry.
How to tackle these challenges with technology?
1. Mobile and web development
Banks and traditional financial institutes are in great need of getting their banks in their customer’s pockets. This is only possible when they bring their services to the internet.
Mobile and web banking function is a delight for customers as it helps in increasing customer engagement and loyalty. Also, the importance of mobile banking apps or web portals is becoming a huge hygiene factor. People are now considering opening a new account if their bank offers this functionality.
Moreover, hiring developers can help you take off this easily while making the life of your customers easier.
2. AI/ML and IoT
Artificial intelligence and Machine learning have been surrounding the FinTech industry for more than half a decade now. Banking solutions have been successfully leveraging AI for modeling techniques and analytics management to explore potential or downgrading factors. While hiring AI developers specializing in artificial intelligence and machine learning can help you in developing fraud detecting tools by analyzing the records.
Chatbots take the client’s through the process of transactions, registration, or any customer support queries in a few minutes. These bots are too efficient in handling frequently asked questions with their automated answers.
A chatbot can do a lot more than this, but as the technology is still evolving the functionalities are in the infancy state.
Related Post – 5 Reasons Why Chatbots Have Become the Need of the Hour!
4. Cloud Computing
The adoption of cloud platforms has accelerated in recent years and has helped increase the scope and pace of innovation. Cloud computing technology improves the speed to market by enabling the rapid development of applications.
Furthermore, it reduces the time and cost of setting up a new server, by eliminating the need for organizations to invest in upfront capital and time for procuring hardware.
Benefits of Outsourcing Software Development
1. Right Talent
By outsourcing software development, financial institutes have the opportunity to access the right talent. An offshore development company in India has teams build with experienced software developers who have previously worked for a similar niche.
These developers also provide a seamless project management process for building transparency and trustworthiness.
2. On-Time Delivery
Offshore developers have the capability to start the project fast and provide deliverables on-time. Also, these offshore programmers can also shorten the development lifecycle as they have years of experience and can quickly resolve common problems, streamline the most complex parts of the development cycle, and reduce the overall length of the project.
3. Risk Management
Outsourcing Software Development carries a lot of risks. So, in order to reap absolute benefits, an organization should develop effective risk management plans.
Fragmentation of components and operations helps mitigate risks. Hence, the key to successful outsourcing is when you know the challenges & obstacles and have a plan ready to tackle the situation.
4. Reduced Time to Market
When you outsource, you do not have to wait for the availability of your in-house team. You simply have to tell the deadline according to your schedule and the dedicated developers will justify the timeline.
Moreover, do you want to get started with software development outsourcing for your digitally transforming financial organization? Simply drop us a line at firstname.lastname@example.org.
And, our IT outsourcing services will help your business grow while increasing profit simultaneously. It will also help your business obtain a competitive advantage without losing focus and efficiency.