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Scaling Your Fintech Business with Outsourcing

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Outsourcing can be a powerful tool for scaling fintech businesses, providing access to specialized talent, cost savings, scalability, focus on core competencies, and access to new markets. According to Grand View Research, the global financial software outsourcing market was valued at USD 56.42 billion in 2022. Outsourcing has become a popular solution for fintech businesses looking to save the time and costs of hiring and retaining a full development team, while increasing efficiency.

In this blog post, we’ll explore how financial software outsourcing can help you grow your fintech business and provide practical tips for making it more effective.

Table of contents:

Why FinTech Businesses Outsource?

Identifying the Right Time to Scale

How to Evaluate Your Outsourcing Needs?

How to Find the Right Outsourcing Partner?

Managing the Outsourced Development Process

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Why FinTech Businesses Outsource?

Financial software outsourcing allows you to focus on planning your business strategy, product strategy, marketing, and customer support, while delegating non-core activities to third-party service providers. The reasons fintech companies turn to outsourcing include:

  • Access to world-class experts;
  • Cost-effectiveness and savings;
  • Fast launch to market;
  • Flexibility and scalability.

Access to world-class talent

Outsourcing financial application development provides access to high-ranked talent specializing in specific programming languages e.g. IO, Ruby, or Racket, or narrow-profile development areas that may be too expensive for in-house development.

Also, software development companies can provide you with high-class experts in the latest trends and technologies, such as Big Data or Blockchain, to develop innovative, customized fintech solutions. At HQSoftware, we have deep expertise in AR/VR, AI/ML, and IoT development services, which means we can leverage our fintech solutions with advanced functionality.

 Cost-effectiveness and savings

A primary driver for outsourcing in the fintech industry is cost efficiency. By outsourcing application development, maintenance, or employee coaching, you can save on overhead expenses for recruiting and other HR activities, team assembly, onboarding costs, benefits such as medical insurance, and training costs.

It can cost you double, both in time and money, if you are seeking out narrow specialists. The search for a well-qualified expert can absorb a lot of time, while with outsourcing, the vendor does it all.

Depending on the complexity of your project and the number of functional requirements to be designed, HQSoftware specialists can assemble a small team in 2 weeks or a large one in 4 weeks, ready to start developing your financial software.

Fast solution delivery

Fintech development outsourcing can help you reduce the time-to-market for your products and services. Outsourcing vendors can quickly ramp up teams to deliver projects on schedule and under budget.

To develop your solution quickly and successfully, vendors select professionals who have already worked on projects in your domain and have hands-on experience in dealing with potential pitfalls. Using proven methods of team management, outsourcing vendors may easily meet deadlines and strictly comply with the roadmap.

To launch your product with a competitive advantage, at HQSoftware we take unique attributes, strategies, focused areas, and target audience specifics into account when building financial software.

Flexibility and scalability

As the project progresses, you may realize that certain features are no longer necessary or identify new requirements that are important for the success of the project.

As your outsourcing provider, we can quickly adjust to your new requirements without disrupting existing processes. You can get additional tech resources or services and quickly scale up or down the development team without incurring significant costs or lower quality. By collaborating with HQ Software, you can easily scale up your financial operations, taking into consideration the scope of your project and market changes.

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Business Development Manager

Identifying the Right Time to Scale

Scaling a business can be an exciting and promising step towards growth and success. However, rushing into scaling before the right time can be detrimental to your business, while waiting too long can lead to missed opportunities. Here are some factors for identifying the right time to scale an outsourcing arrangement:

  • Your company is consistently seeing strong demand and rising income;
  • There is little to no competition and your product or service is unique;
  • You need deep expertise or access to cutting-edge technologies for your project;
  • You want to launch your product as soon as possible;
  • Your current staff is operating at peak efficiency and cannot take on any additional work without compromising quality or timeliness;
  • The development of your project takes longer than intended.

How to Evaluate Your Outsourcing Needs

Whether your aim is to reduce costs or improve efficiency, outsourcing can be a valuable tool for businesses of all sizes. However, before jumping into outsourcing, it’s crucial to evaluate your needs to find the right provider for your business. The two most important points to consider are

  1. Identify specific development requirements;
  2. Verify potential risks and mitigation strategies.

Let’s discuss these.

1. Identify specific development requirements

The first step is to define areas that could profit from outsourcing. This may be bookkeeping, accounting, tax preparation, payroll processing, financial reporting, etc. Gather your project requirements and list tasks for the outsourcing team to choose the most effective development approach. Perhaps you can prioritize them based on “must-have” vs “nice-to-have”. The more precise your requirements are, the faster you will proceed to the development stage.

You can outline the programming languages, frameworks, databases, and other technologies required. Determine which existing systems your new product will require integration or data sharing with. Remember to consider the nature and sensitivity of the data you will use. Data protection, encryption, access control, and other policies and standards must be specified. Then you may research options or discuss them with the development team.

2. Verify potential risks and mitigation strategies

Fintech businesses operate with a huge amount of strongly confidential data that needs to be protected through compliance with international regulations such as the European Union’s General Data Protection Regulation (GDPR), the California Consumer Privacy Act (CPRA), the Personal Information Protection and Electronic Documents Act (PIPEDA) in Canada, or the Payment Card Industry Data Security Standard (PCI). To avoid future security and legal issues, think about the risks and challenges associated with outsourcing, such as data security, intellectual property protection, and secure provider management.

You should establish clear and comprehensive contracts that define the scope of work, payment terms, termination clauses, and performance metrics to mitigate other crucial outsourcing risks such as:

  • cost escalation on outsourcing services;
  • lack of control over your future partners;
  • failure to deliver your project on time;
  • ​​likelihood of financial repercussions.

After you’ve clearly defined your outsourcing needs and expectations, it’s time to find the right outsourcing partner.

How to Find the Right Outsourcing Partner?

While it’s important to find a partner that offers competitive pricing, the quality of their work and the strength of their relationship with your business is a bigger issue. Below are the basic steps to help you find the right outsourcing partner.

How to Find the Right Outsourcing Partner - Scaling Your Fintech Business with Outsourcing
How to find the right outsourcing partner

 Examine expertise

When evaluating potential partners, consider their experience, expertise, and track record. Seek out companies that have deep knowledge of the financial sector or your narrow specialization, such as tax management or auditing.

Financial outsourcing providers should always have highly ranked experts and provide the particular services you require. Verify the communication skills of any possible partners and their ability to deliver frequent updates and progress reports.

Establish effective communication 

When outsourcing any project, consider how you want to communicate with your outsourcing team. You need to establish the language of communications and working hours during which the development team can reach you. Location and cultural fit are also important factors to think about, especially if you hire specialists from different places. You must be aware of their business hours as well and agree upon a time for communication if you are in different time zones, to avoid communication gaps.

Don’t forget to choose the most convenient way to communicate for both of you. That could be email, phone, video conferencing, or another messaging service such as Slack, etc. This will ensure a successful outsourcing partnership and prevent any misunderstandings or conflicts in the future.

You may also control the development progress using tracking tools, request further information about any stage of the project, and communicate with any member of your team at any time.

Set up a contract

Through contract negotiations, it’s important to discuss key areas such as scope of work, service levels, project milestones, data security, intellectual property rights, and confidentiality. It’s also important to ensure that the contract clearly defines delivery timelines, budgets, and dispute resolution procedures.

Keep in mind that the contract acts as a legal document outlining the parameters of the outsourcing arrangement and can protect both parties from any potential disagreements.

Managing the Outsourced Development Process

Here are a few recommendations that might assist you in streamlining the process and obtaining the best outcomes while managing an outsourced development process.

Managing the Outsourced Development Process min - Scaling Your Fintech Business with Outsourcing
How to manage the outsourced development process

Сhoose a project manager

A project manager establishes the project’s objectives and goals; determines the resources needed, such as the development team, budget, and technological tools; and controls the development progress. To develop your future financial software with the most precise attention to details, a project manager will provide you with a high-class expert that specializes in software development in the financial sphere.

As a result, a project manager will prepare a well-documented project plan that includes your specific requirements, timelines, and deliverables. This will help to ensure that the outsourcing team understands the result expectations and is able to meet deadlines.

Facilitate communication

Establish a comprehensive communication line. Clear objectives and goals, frequent check-ins, and open communication can all contribute to keeping the project on schedule. Consider the cultural differences between your company and the outsourcing team. Awareness of cultural nuances can help to avoid misunderstandings and ensure that everyone is working towards the same goal.

Monitor progress

Regular communication and review mechanisms to monitor work progress, cost, and quality will help you identify and address potential issues or delays, keeping the outsourcing arrangement on track.

Perhaps you should discuss the implementation of remotely managed services and cloud-based solutions that will help you control the project workflow, request information about any stage of the project, and communicate with any member of your team, reducing the likelihood of any kind of disruption.

Performance review

To achieve performance synchronization, you should clearly define the goals and objectives of your outsourced project, establish key performance indicators (KPIs) to measure progress, and address them to the outsourcing provider. As your outsourcing provider, we regularly report on progress and provide updates on how our work is contributing to the overall goals of the project.

If you have a well-documented project plan with specific timelines and deliverables, it won’t be a challenge to review your goals. Once you have identified the scope of work and set a delivery time, you are aware of what to expect from your financial software outsourcing partner.

Overall, successful outsourcing requires careful planning, effective communication, and a focus on risk management to minimize financial losses. By leveraging the abilities of outsourcing partners, you can access the latest technology, tools, and best practices, which can help to improve the quality of your products or services and increase customer satisfaction.

Need our Help?

HQSoftware provides top-class experts specializing in financial software development. We have developed more than 450 projects  and put all IP protection procedures into practice. To help you acquire the best financial software for your budget, we carefully assess your needs and provide expert guidance on functionality, product-market fit, and UX improvements.

Check out the financial software development services page to learn more about how we can boost your business with advanced fintech solutions.

Andrei Kazakevich

Head of Production

To ensure the outstanding quality of HQSoftware’s solutions and services, I took the position of Head of Production and manager of the Quality Assurance department. Turn to me with any questions regarding our tech expertise.

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