More and more companies are looking for FinTech software outsourcing providers nowadays. This article will share a few reasons why it’s crucial for banks and other financial institutions to innovate with financial software development outsourcing providers. Banking application outsourcing services might be a good extension for your financial software development company.
Persuing disruptions in the FinTech industry
FinTech startups appear everywhere every day. As a result, large banks and financial institutions might feel threatened. The institution's size and budget are not an unbeatable advantage anymore. With every new disruptive idea or technology that startup founders develop every day, the risk that big financial players will be quickly left behind grows more and more. Things like Blockchain, Mobile Banking, AI-supported trading, and investment are already changing the banking and investment industry. So, if old players will not follow those trends, their customers will quickly move to new, safer, faster and more user-friendly solutions.
FinTech Software Outsourcing, but why?
There are a few reasons why banks and other financial companies may want to outsource their FinTech software development:
1. None wants to work at a bank!
Well, it’s not entirely true. For example, some people enjoy working at banks. But the question is if those are the people that banks need to develop new disruptive solutions?
What is the first thing that comes to your mind when you think about working at a bank? Probably stability, safety, low pace and high salaries. Don’t get me wrong, those aspects of working at a bank or other financial institutions are essential and valuable for many people. But do you think this stable, safe and low-paced work environment empowers creativity? Do you believe that this is a good place for disruptive innovations as a fast-paced startup? A startup, where “innovate or not to innovate” equals “to be or not to be”?
FinTech companies need innovations now more than ever. So probably, this is one of the reasons why they are searching for FinTech software outsourcing providers who have access to talented developers.
2. Corporate financial institutions are not designed to support innovations
Corporates are not the best places for innovative ideas to be born. It doesn’t mean that it’s impossible to innovate in corporate structures, but it can be challenging. Big companies usually design their corporate culture to support sustaining the status quo. Therefore, it’s hard to implement some disruptive changes and develop new innovative ideas in such an environment. Changing the culture of such a big organisation might be challenging, time-consuming and costly. The question is if those companies have the needed time to change? Companies buying innovative financial software development services are buying more time necessary for transforming their organisation.
3. Know-how and new technologies
The FinTech industry speeded up recently. However, big financial companies also struggle with being up to date with existing technologies besides being innovative. This highly regulated, risky and complex industry development of new products takes much time. Especially when minor software bugs or security issues can cause significant financial losses, it’s not easy to pivot and change the development to new technology or strategy if the current user isn’t good anymore. Moreover, new technologies, frameworks, and tools in IT are developed so fast that it might be challenging for banks to be up to date with the latest solutions. This is why many companies are thinking about asking someone who specialises in specific (new) technologies to help them.