Fintech Outsourcing Trends

7 Fintech Outsourcing Trends for a Business Developer

by Rick Martin

Seldom does the entrepreneurial developer find so much low-hanging fruit as now seen in the fintech industry. With investors providing $5.3 billion in capital to fintech startups during Q1 2016, opportunities for the innovative developer are ripe for the picking. Especially interesting is the growth of investments in fintech — 67% since the same period last year. The rapid growth and infusion of investment cash equates to growth in fintech outsourcing opportunities in several areas of technology. Let’s take a look at seven of those now trending or likely to do so in the near future.

1. Big Data Analysis

Big data analytics represents an emerging technology that is little understood by those likely to benefit from it the most. According to a Forbes study, the majority of 564 executives surveyed reported having no strategy for competing in a big-data analytics environment. For fintechs seeking a ground-floor opportunity in a market poised to explode, that is good news. But many fintechs do not have the resources with which to innovate in the big data space. A TAG Fintech report indicated as much, revealing that a significant percentage of fintech companies consider outsourcing big data analytics to third-party providers. For the innovative developer, that is even better news.

Whether yours is a company looking to outsource for big data analytics capability, or a fintech needing a technology partner with experienced in this space, you need to take a good and hard look at what is getting ready to come down the pipe. A study by IDC forecasts the big data market to reach sales revenue of $187 billion by 2019. Those dollars are expected to be spent on tools, software, and big data analytics services — all of which mean opportunity for those who can deliver.

2. Social Media

As early as 2014, fintechs were realizing the value of social media in helping their financial service clients to connect with their markets. Unlike conventional online customer portals, social media allows companies to engage their customers on a personal level not possible with websites and email alone. But if you think their use of social media is limited to having a Facebook page and a twitter account, you’re wrong.

Tech-savvy financial service companies have re-engineered social media to allow customers to check credit and even open a bank account. And we can only assume this is still a humble beginning.

As social media becomes the de facto means of customer engagement, financial institutions will have little choice but to rely on the expertise of fintechs and their technology partners for the technology they need.

3. Software Development Outsourcing

When fintechs realize they have the technology but not necessarily the skills they need to build their team, the solution to outsource specific technologies to third parties can make a lot of sense, while saving a lot of dollars.

The key reasons companies turn to outsourced software developers are flexibility, responsiveness, and lower cost. As the outsourcing industry has matured, top outsource providers have come alongside their clients and partnered with them in a way that accomplishes all three objectives.

Outsource software providers based in Ukraine, especially, have become highly competitive solutions for fintechs needing a technology partner. Top Ukrainian outsource vendors boast multinational R&D centers, the best price to quality ratio, and an English-fluent staff.

All fintechs may not have the resources in house with which to fully develop an application. By partnering with a top-rated software outsource vendor, however, the opportunities for market share can be limitless.

Have a project in mind?
We are here to discuss

Contact us

4. APIs

Application Programming Interfaces, or APIs, are building blocks programmers often use when creating new programs. By using APIs, a programmer can develop a feature-rich application much faster than building one from the ground up. Some companies protect their APIs, while others make them freely available to encourage third-party development of applications that will promote the use of their products or services. Mastercard, for example, offers a slew of APIs that allow applications to use their payment solutions.

As the financial services industry requires more integration between players, APIs will become an even more-valuable component of the fintech ecosystem. So much so that lucrative opportunities abound for the outsourced developers able to work in this space.

5. Insurance

Okay, not every fintech opportunity hangs low on the tree. A few require a climb to the top, but the rewards will be great for the hardy few who aim high. And so it is with the insurance industry. Although 90% of insurers report fearing loss of business to fintech startups, only 43% plan to partner with fintechs, and less than 14% report having current joint ventures with fintechs. Not only does this stance turn a blind eye to the power of fintech to disrupt the insurance industry — which it will certainly do. But it also means a ground-level opportunity to disrupt an entire market for the fintechs that can break through the ice and form partnerships with insurance providers.

And what opportunities might insurance offer the fintech industry? For one, ⅓ of UK households earning less than £20,000 have life insurance, or insurance on their household belongings. Stodgy and inflexible insurance plans either fail to accommodate the low-income uninsured, or the plans their offer are not affordable for them. As fintechs slowly but surely penetrate and disrupt legacy insurance systems, new opportunities will arise which fintechs will be uniquely qualified to embrace.

6. SAAS & Cloud Systems

The trend for years has been away from purchased software applications and toward SAAS (Software as a Service), in which users typically purchase a subscription to use a particular application. Adobe Creative Cloud is an excellent example. While some vendors, such as Adobe, allow users to download and use their SAAS applications as long as the user’s subscription remains valid, others have placed their software online and designed it to be cloud-based — accessed through a web browser. Regardless of the delivery model, SAAS seems to be the way we will purchase and use software in the future.

A study by software selection site Better Buys indicates that the shift from the traditional software delivery model to SAAS will result in $55 billion in market revenue by 2026. This means high earning potential for innovative Cloud/SAAS developers.

As with Adobe, not all SAAS software is accessed through the cloud. But most eventually will be. According to Gartner, global market revenue for cloud-based services is projected to reach $204 billion in 2016. If $204 billion isn’t enticement enough to lure fintechs into the clouds, we don’t know what is.

7. Bitcoin & Blockchain

Bitcoin and blockchain technology presents unique opportunities for truly innovative developers.

According to a collaborative of economists from UCL Centre for Blockchain Technologies, Deutsche Bundesbank, the University of Wisconsin, and The New School, the Bitcoin economy has undergone an evolution. First, Bitcoin was a novelty enjoyed mostly by techies, before it became the currency of choice for such nefarious transactions as illegal gambling, illicit drug purchases, and illegal weapon purchases. Today, Bitcoin has evolved into a legitimate currency system that is used by millions to pay for all sorts of goods and services.

What all this means for the truly innovative fintech is a wealth of opportunities, many yet unseen. For instance, as more companies decide to accept bitcoins, there will be an increasing need for intermediary technologies that provide seamless Bitcoin integration with existing point-of-sale systems. But that’s not the best part. Blockchain technology, where a central ledger is used to track and secure transaction information, is not limited to Bitcoin. As new digital currencies emerge, so too will the need for fast, robust, and secure blockchain architectures. Technology outsource providers that can capture this fintech outsource business will bank the rewards.

How Ignite Can Help?

Ignite is a world-class Ukranian-based software outsourcing company. We provide top quality technology solutions at competitive prices. With six R&D labs across Europe, we are strategically positioned to partner with fintechs and financial industry leaders.

Our experience base also includes development for the auto industry, mobile app development, cloud technology, gaming, e-commerce, media and entertainment etc.

Why not contact us today for a free consultation? Let’s get started.