With the competitive banking and financial industry, fintech companies are expected to build their products and systems in-house. But the ever-evolving technological landscape makes it difficult – not to mention expensive – to keep doing so. Companies that always build solutions from scratch will eventually face the challenge of high costs, lack of expertise, and outdated tools and equipment.
This the reason more fintech companies choose to outsource today. Outsourcing gives them more advantages, such as access to industry experts and tools at a fraction of the cost of an in-house team. It also allows them to reach goals faster by hiring someone to handle specific areas of their business.
Where is Outsourcing Most Useful?
In many industries, companies hire third-party service providers for administrative tasks and back-office support. Although fintech companies generally do the same, many are discovering the value of subcontracting specific technology areas, such as the following:
One of the problems of tech enterprises is having an innovative idea but lacking the technology to actualize it. Alternatively, they may have the technology and resources, but not enough manpower to complete development in the time frame they want. Startup game developers, for instance, can outsource 2-D game development while their in-house team works on enhancing and maintaining current products.
Fintech companies can do the same. They can outsource their software development for new financial products while making sure the competition will not surpass them. A third-party service provider lets them compete without putting other projects on hold.
Big Data Analytics
Big data is essential in maintaining operations and developing new solutions. As people continue to use their electronic devices to make transactions, fintech companies’ large databases update in real-time. But collecting and analyzing all this data can be too much for an in-house team.
Fintech companies may outsource big data analytics, collecting insights without losing focus of key business areas. They may opt to analyze and interpret insights in-house, or through third parties as well, for easier integration.
Fintech companies use social media for brand awareness, customer engagement, and conflict resolution. They also use these networks to gather information on new enhancements and solutions. Social media allows them to bridge the gap between their industry and their clients.
However, managing a social media network is a full-time job. By outsourcing the task to a more knowledgeable partner, fintech companies can run profitable social media campaigns and enjoy the perks without taking their attention away from day-to-day operations.
Why Outsourcing Remains Popular
Outsourcing has been a thing for a long time, but more startups are seeing the value in these services now.
- Access to In-Demand Experts – Outsourcing allows companies to start projects immediately, helping them save time and money on training new or inexperienced employees.
- Faster Time to Market – Outsourcing allows companies to streamline processes with the best practices, resulting in faster product rollouts.
- Increased Security – Outsourcing allows companies to work with skilled security specialists who protect valuable customer and business data.
The advantages that outsourcing provides companies outweigh the initial costs of partnering with them. As the fintech industry continues to grow, companies will have to adopt solutions that will help them retain their competitive edge.