Over the last five years, the number of users who started using fintech solutions in their lifestyles has doubled yearly. The COVID-19 pandemic has been another major driving force for individuals to choose mobile banks rather than visit banks and make contactless payments than dealing cash.
Because of the increased popularity of fintech, the industry has become extremely competitive; to succeed among competitors, it is critical to outperforming them in every possible way. One of the most important aspects is a mobile app, which serves as the “face” of a fintech company’s business without offices and bank branches.
Pros and cons of fintech development outsourcing
Outsourcing of fintech development is based on the concept that, rather than assembling a team of developers and employing them as full-time staff, a specialized development company can manage the entire development process on a contractual basis. Here are some of the aspects of fintech development outsourcing that are superior compared to in-house development and those that need additional attention.
Benefits of Fintech Development Outsourcing
Saving on money
Developers’ wages are determined by where they live. For example, while US or Canadian developers charge $90-110 per hour, developers from other regions such as Eastern Europe (Russia, Ukraine), Asia (The Philippines, India), and Southern America (Brazil, Argentina) charge far less, $18-40 per hour, while delivering code of the same, if not higher, quality. Most development teams can easily work remotely, updating their progress in team collaboration platforms and holding meetings with other departments via Zoom or Skype. So, if you’re starting a fintech company in the United States, hiring offshore fintech developers can easily cut development costs in half. Read our dedicated article to learn more about the best countries to hire developers.
Availability of the latest technologies
Collaborating with a firm that is a specialist in fintech software development services grants a fintech company easy and direct access to a degree of knowledge and expertise in the most recent solutions, which in-house employees who have fewer projects to work on cannot match. Trending cross-platform frameworks, for instance, enable developers to build apps for iOS and Android from a single codebase with just small alterations. Notwithstanding the marginally greater hourly rates, cross-platform development is less expensive in the long run since the hiring firm only has to pay just one team of developers.
Allows Fintech firm to focus on the core business
As a fintech company, the primary business is to provide financial services to users and businesses, and developing apps is not the core business. So it is pointless to incur additional time and costs to establish an in-house development department, invest in HR activities, and hire additional managers. Additionally, after the development of the initial version of an app, some of the developers will likely need more work. And if those developers are full-time staff, the fintech company will still need to retain them in the company at such time that another major project comes along. The other option is to lay them off. However, by outsourcing the fintech development app, a fintech company will not have these issues. Still, it will only make payment for the app development firm’s work while the development company handles all hiring and management.
Easy transfer of projects
When working on a client’s project, a professional development team always keeps in mind that the project may be handed off to another team in the future, so they strive to make the project’s internal structure, code, and other features easily understandable by other developers. The use of widely recognized practices and highly detailed documentation eliminates the risk that is common in-house development: for example, if an initial team develops an app without proper documentation and leaves the project, the newcomers will have a difficult time understanding and learning how everything works.
The Drawbacks of Fintech Development Outsourcing
Fintech firms have less control over the project
Working with a remote team of fintech software developers has a few drawbacks, one of which is less control over the working process compared to in-house development. Because developers are employed and managed by different companies, your management may need a more relaxed understanding of their roles and responsibilities and their working terms and conditions. As a result, development progress may be slowed, and quality may suffer. The primary cause of loss of control is usually a communication breakdown. To avoid this, create a meeting schedule, report templates, and assign team members to report on and oversee the development process from the start.
There is less involvement of the firm
In-house employees share your company’s core values and understand its needs better than outside contractors. After all, they specifically chose to work for your company. In the case of outsourcing, fintech developers may be less invested in your project, resulting in lower quality. The antidote here is to select a fintech software development company with a proven track record, positive references from previous clients, and a mindset similar to yours. Clutch.co is a popular resource for client reviews on software developers; check out Surf’s page on the platform.
As the fintech industry expands and more finance companies adopt a “mobile-first” strategy, the demand for quality fintech app developers rises. You can get the best talent for your project at a low cost by outsourcing app development. Hiring an external contractor also saves your management and HR department from many issues.
The key characteristics to look for in potential contractors are relevant expertise in fintech development, shared values and working culture, and the use of cutting-edge technologies.