The combination of regulatory requirements, technical complexity, rapid innovation, and specialized talent needs makes fintech development outsourcing distinct from other industries. Financial software development partners must possess not only excellent technical expertise but also a deep understanding of the financial industry's regulatory and security standards. Outsourcing fintech development is becoming an increasingly popular choice for many companies, from fintech startups to established financial institutions, for several reasons: cost efficiency, greater flexibility, and easier access to specialized expertise.
We prepared a list of questions and tips designed to assist you in identifying a reliable partner for your fintech development outsourcing requirements.
Step 1: Select the cooperation model or service
Before beginning your search for fintech outsourcing providers, determine the type of cooperation model or service a project requires. The main cooperation models in fintech outsourcing are the custom solution development, managed team, and extended team. Understanding what each model offers is crucial to choosing the best fit for your needs.
Custom solution development
Custom solution development addresses a specific business challenge with an end-to-end solution. This approach minimizes the need for extensive management or oversight from the client's side because the outsourcing provider is responsible for managing the entire project lifecycle—from initial analysis and planning to development, testing, and deployment.
The key advantage here is that the client can focus on their core business operations while the outsourcing partner takes care of the technical development, ensuring that the solution is delivered efficiently and effectively, tailored to the client's needs, and ready for use upon completion.
Dedicated Development Team
In this model, the outsourcing vendor provides a team of professionals who work exclusively on the client's project. This team can include software developers, QA engineers, project managers, and other necessary roles operating remotely. It is easily scalable and allows for team size and composition adjustments as the project evolves.
A dedicated team is best fit for long-term projects with evolving scopes, where requirements might change or expand over time. It is also a good option for companies looking to scale their operations without the logistical and financial burdens of hiring in-house.
Extended Team
The extended team model strengthens the existing in-house team with additional talent from the outsourcing vendor. These team members work under the client's direct management and assimilate into their internal processes and culture.
This model offers the flexibility to scale the team according to project needs, providing support for workload peaks or specific expertise gaps. It is often required in projects where specialized skill sets are needed temporarily or for certain project phases.
N-iX offers all three cooperation models and can adjust the teams' configuration according to the client'sneeds.
Step 2: Strategic alignment and expertise of the provider
The second step in effectively outsourcing fintech software development is to form a list of outsourcing providers with sufficient expertise both in relevant technology and in the fintech domain. Here are the questions an outsourcing provider should have clear answers to:
Does this fintech outsourcing company have expertise in all the necessary technologies for the project?
Determine the project's scope and required technologies. This includes programming languages, frameworks, cloud platforms, cybersecurity measures, and any other crucial technologies. Look for technical certifications from reputable organizations in areas like cloud platforms, cybersecurity, and software development methodologies. These certifications demonstrate the provider's market presence and commitment to high standards.
What is their experience in the fintech sector?
Examine case studies from past projects, pay attention to technologies used, the challenges encountered, and how they were resolved. Successful implementations in projects similar to yours can be a strong indicator of relevant expertise.
For example, N-iX has successfully delivered more than 250 fintech development outsourcing projects, consistently highlighting our achievements in this domain. Our partnerships with AWS, Azure, and Google Cloud, among others, and certification by FSQS ensure that we strictly adhere to financial sector regulations and the latest security standards.
How does this fintech outsourcing provider keep up with financial regulations and compliance standards?
This question assesses the vendor's commitment to legal compliance and proactive approach to regulatory changes and data protection challenges. Look for examples of how they have navigated compliance with specific laws such as GDPR, CCPA, or other regional financial regulations relevant to your project. Additionally, verify their compliance with international security standards, such as ISO 27001 for information security management and PCI DSS. Holding such certifications is a strong indicator of their commitment to securing client data.
Determine if the provider offers compliance advisory services. This can be particularly valuable for fintech startups or companies entering new markets, as it indicates the provider's capability to guide clients through complex regulatory landscapes.
For instance, N-iX maintains all the required certifications to develop secure and scalable financial solutions, regardless of their complexity or span.
Read more: How fintech outsourcing providers meet industry regulations
Step 3: Establish effective processes and communication
The development and testing processes are key to identifying and mitigating risks early in the project lifecycle. In fintech, where financial transactions and personal data are involved, the cost of errors can be very high. Robust communication, development, and testing processes help in the early detection of potential issues, reducing the risk of financial losses and reputational damage.
How would the potential fintech outsourcing provider handle changes to the project scope or requirements?
Changes in project scope or fluctuating requirements can introduce new risks, including security vulnerabilities, compliance issues, or integration challenges. This can create an unexpected need for expertise beyond the initial team. A clear process for handling these changes helps identify, assess, and mitigate them promptly, ensuring that the project remains secure and compliant.
N-iX leverages its Centers of Excellence for expert consulting and tech expertise, promoting the sharing of best practices and ensuring service quality. We are exceptionally flexible in hiring new talent and accessing additional expertise. N-iX has over 1M experts in the talent pool, and it takes, on average, only 4 to 6 weeks for any seniority level to fill a position.
What does their typical SDLC look like?
The effectiveness of processes in outsourcing arrangements depends heavily on clear communication and collaboration between the client and the provider. Asking about the development and communication practices helps understand the mechanisms for regular updates, feedback loops, and issue resolution, ensuring smooth project execution.
For example, N-iX adopts effective development methodologies tailored to client preferences, including Agile, Scrum, Lean, and Kanban. We emphasize clear, timely communication and cultural alignment with European and American clients for seamless integration into client teams.
What is this vendor’s approach to ensuring quality?
Fintech projects face technical, operational, and security risks. A thorough understanding of the outsourcing partner's development and testing methodologies can provide insights into their risk management capabilities, particularly their ability to identify, mitigate, and manage risks throughout the development lifecycle.
At N-iX, we employ a comprehensive approach to development and testing, starting with a Discovery Phase to validate product concepts, define scope, and build prototypes with the help of experienced architects, business analysts, and UX experts to minimize risks.
Wrapping up
Finding the right fintech development outsourcing partner shapes the outcome of the whole project. Asking the right questions puts you in a stronger position to make a well-informed choice that matches your unique needs and objectives.
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