Fintech startups are having a growing and disruptive impact on the financial service industry. The first quarter of 2016 realized global investments in fintech ventures of $5.3 billion — a 67% increase since Q1 2015. With the fintech wave on the rise, new startups emerge almost daily — many with a multi-million dollar idea and the investment dollars to make it happen. The first big decision startups often face is whether to develop their wares in-house, or to outsource the development of their products or services.
For many, the decision to outsource is a no-brainer. But it hasn’t always been so. The Internet is littered with painful lessons about outsourcing in years past, with one company after another lamenting over purchasing bug-ridden code. Hopes of lower costs and fast turn-arounds were often dashed by the far-reaching affects of poor quality.
But that was then.
Today, outsourcing has matured into a healthy and capable industry with nearly $90 billion in annual revenue. Well-established vendors can, indeed, offer cost savings and faster turn-arounds compared with in-house development teams, often at quality levels that are superior to what developer-employees can deliver. The key to finding a qualified outsource developer for your startup or project comes down to five questions. Let’s take a look at the questions you need to ask when vetting outsource developers, so you can see how your candidates measure up.
Are They Fintech Technology Experts?
If your company seeks a development partner in the fintech space, you will need an expert. Not just an expert on software development, but a company that understands the unique combination of technologies required to develop fintech applications. By asking about the developer’s experience in the following technologies, you can be sure that your applications will not only be powerful, deployable, and innovative, but that they will also meet banking industry standards for data security and privacy.
Big Data and Data Analytics
Big data is not just a buzzword, it’s a force to be reckoned with. Google, online marketeers, and both private and government sector organizations have collected heaps of data on nearly everyone alive. Much of that data is available for the picking, and gigabit networks and low-cost storage have made it accessible. But availability and accessibility are not enough to make data useful. Your developer must be innovative in finding new and exciting ways to analyze data, from developing non-traditional models for credit scoring to predictive analysis that can anticipate customers’ behavior.
Integration with Existing Infrastructures
Not every fintech product or service will stand on its own. Many fintech applications — no matter how innovative — will need to integrate seamlessly with existing ecosystems, at least until fintechs can figure out how to disrupt those, too. In order to make your application play well with others, your developer must have an in-depth understanding of legacy systems and how to tie in to them without shutting them down.
Customized Customer Experiences
Although we may have to live with legacy systems for a while longer, customers do not expect to live with the one-size-fits-all customer experience. Developers, today, not only have access to big data, but they also have access to smart ways of manipulating it. By merging big data and artificial intelligence, developers can produce systems that treat now two customers the same, but tailor the experience based on each customer’s past behavior and current needs. How well you can serve your customer will be a factor of how well your developer understands how to create a unique and positive customer experience.
Core Competencies that Include Cloud-Based and Mobile Platforms
In 2015, 33.4% of all global web traffic originated on a mobile phone, an increase from 28.9% in 2014. Likewise, among IT professionals recently surveyed, 77% reported using a private cloud, up from 63% in 2015. The increase in mobile browsing and in cloud utilization is a trend that will only continue.
If you hire a developer who does not have the skills to fully exploit the use of both cloud-based and mobile platforms, you put yourself at a tremendous disadvantage as a fintech product or service provider. Whether or not you can envision how your idea might mesh with these technologies, your developer must be able to not only envision it, but to also make it happen.
Data Security and Privacy
It is not enough that your developer is a super-genius at writing code or developing a wizbang GUI interface. If they are not experts at protecting data, they are not experts at fintech technology. Now, that is not to say that every member of the development team must be security experts; many will not be. But the developer must have resources in-house with which they can ensure that your project is compliant with applicable regulations.
Government regulatory agencies in Europe and elsewhere set strict requirements for how financial data must be handled in transit, at rest, and when stored. It is your responsibility to ensure that the software you sell your customers is secure and in compliance. You begin by making sure your developer has sufficient experience in this area.
Do They Have a Diverse Skillset?
It is tempting for a startup, especially, to hire a one-person company to develop their idea. Unless you have a really simple idea, you should dismiss the notion once and for all. Even if your idea is simple enough — or the lone-developer brilliant enough — that they can pull it off, there are many reasons to use a company where a team of developers can work on your project. While the advantages of using a team would (and might yet) justify a complete article on its own, there is one compelling reason why you might want to do so: diversity of skill set.
Most fintech products or services worth their salt require a combination of different skill sets for development. Not only is one programming language often required, but expertise in layout, graphics, technical writing, and software testing is needed to produce a robust, scaleable product that meets the customer’s needs. A competent developer will be able to provide you with a list of their core competencies, as well as a description of any unique skills they have onboard. The list should include all the technologies we cover in this article, and then some.
Do They Have The Resources to Handle Your Project?
Big ideas sometimes require big efforts to bring them to fruition. One consideration many startups do not think about until problems arise is whether the developer is simply big enough to handle the project. Many tales are told of small development companies, eager to get work, who take on projects that are too large for the resources they have available. In some cases, deadlines are missed, but worse, still, is when the developer has to contract out pieces of the project because they do not have adequate staff to complete it.
It is a good idea for you to ask your prospective developer about the full-time staffing and facilities they have available for your project. Depending on the size of your project, you may need one team or multiple teams. Just make sure the developer can complete the job in-house, where you can have adequate control. If the project requires your developer to use a third party for some special task, make sure you understand the details in advance. Developing your project in a piecemeal manner is not the mark of a solid developer.
What Systems Do They Use for Managing Projects?
The enormous complexity of modern software dictates the use of some form of project management to guide the development process. Such a system will include processes for defining the project specifications, setting and monitoring timelines and milestones, assigning tasks to team members, tracking the project’s progress, and product testing, to say the least. A robust system will also facilitate periodic customer reviews, accommodating change requests, and cost management. While the project administration tools of some smaller firms are limited to the use of software packages, such a Zoho, progressive companies go a step further and use one of many project management methodologies such as Scrum.
As opposed to a software package or rule-based project management platform, Scrum creates an environment in which a self-directed development team works to solve its own problems. Moreover, Scrum stipulates that projects be built in short iterations with frequent testing of each component.
The advantage of your developer using Scrum, or something similar, are manifold. However, the primary benefit to you is that Scrum allows for flexibility during the development process, so changes can be incorporated without extensive rework. This means you are not locked into your original specifications if you want to change them after development has begun.
Do They Have a Large Digital Footprint?
One of the best ways to evaluate the capability of a prospective development company is to examine their digital footprint. By this, we do not mean how many breadcrumbs they have left across the Internet. By digital footprint we mean to include the company website, social media channels used, and whatever marketing efforts they have in play. The days of cool splash pages selling a business’s services are over. Viable companies, today, should have a rich and diverse array of company information available on the Internet.
The website of any experienced developer should include a blog that is updated daily with value-rich information. Case studies and white papers should be available so you can evaluate their success with other clients. And a complete description of the services they provide should be included.
The Facebook page should reflect a positive relationship between the developer and their clients. Similarly, if the developer has a YouTube, the videos should be informative and have a good number of views.
Ask the developer what their digital footprint entails, and don’t include on your short list any who are deficient in this area.
How Ignite Can Help?
With every opportunity comes challenges. To turn the challenges of fintech technology development into opportunities that will pay off, you need a technology partner. Ignite is well-positioned to bring your fintech product or service to fruition. With six R&D labs across Europe, we have the resources to take your project from concept to deployment and beyond.
While our customers include international companies, we bring the same passion and commitment to each of our clients, large or small. We believe you will find us the perfect technology partner for your next fintech project. Why not contact us today for a free consultation? Let’s get started.