According to the latest PWC Global FinTech Report, 82 percent of clients are turning to FinTech financial services such as money transfers and payments, financial portfolio planning, savings and investment strategy, borrowing, and insurance to spur innovation and to disrupt existing incumbents in the financial sector. The exponentially growing consumer demand is applying pressure on many FinTech startups to build and scale their business.
If the good news is that most FinTech startups are increasing their user base, the ground reality is that a lot of companies are ill-prepared to handle the increased business. Scaling up is possible only if you’re deeply invested in overhauling your application’s architecture, and that nearly always involves reorganizing your tech stack and tackling the hardware and software issues relating to your product.
3 Challenges That FinTech Startups Face in Scaling Their Business
1. The Problem of Harnessing Cash Resources Appropriately
Merely deciding to pursue a growth curve isn’t enough; scaling up demands that you design a blueprint for handling your cash flow in such a manner that you don’t hurt yourself financially down the road.
2. The Need to Balance Payroll Costs and Revenue Streams
FinTech startups pursuing an exponential growth curve experience what is known as the tidal wave effect. There’s a high tide when consumer demand will be at its peak and manpower is correspondingly increased. But in a low tide (low growth) scenario it becomes difficult to sustain higher payroll expenses when there’s not enough revenue accrual to justify the expense.
3. The Danger of Missing the Woods for the Trees
Customer satisfaction is the Holy Grail that incentivizes FinTech startups launching themselves on a growth curve. But many companies find themselves missing the woods for the trees – meaning that in their haste to micromanage growth, startups tend to lose focus on the customer’s needs.
How Outstaffing Helps FinTech Startups Scale Performance and Efficiency
The common denominator threading almost all significant upscaling challenges that FinTech firms face is how manpower resources are utilized, and the time, energy, and money that manpower management demands.
According to Aleksandrs Malins and Igors Astapchiks, company partners of IT company FortySeven Software Professionals, FinTech startups would do well to consider outstaffing as a pivotal strategy in overcoming the challenges of upscaling business in the hugely competitive financial services market.
Outstaffing essentially means the integration into the FinTech startup of an external team of IT specialists. These specialists become part and parcel of the startup’s IT projects sharing much-needed expertise for IT development services and quality assurance (QA) services, besides extensive IT auditing and ongoing consulting services linked to any project from conception to completion.
The chief benefit of outstaffing is that it creates opportunities for raising business volumes without a corresponding escalation in fixed long-term costs. You get a chance to maximize productivity per employee without committing yourself to more substantial financial outlays, and you avoid the administrative headaches associated with handling a permanent staff.
How IT Outstaffing Company FortySeven Software Professionals Actually Helps in up Scaling FinTech Startups
Clients populating the financial services sector are increasingly aware of the fact that it’s becoming possible to spin out any segment of their business to contractors or dedicated software development teams. FortySeven Software Professionals maintain that the smarter way of maximizing startup resources is to focus on the areas of business that respond well to outstaffing.
With FortySeven Handling Outstaffing, FinTech Startups Harvest 5 Tangible Benefits
1. Whatever the FinTech Startup Can Conceive, It Can Achieve
How do you meet the requirements of a company operating at a level that demands a hundred times the startup’s latent capacity? If you’re dependent on an in-house team of specialists, you will make costly long-term investments to escalate your potential capacity a hundred times over. Through outstaffing, you’d be expanding efficiently by bringing in a dedicated team of specialists developers at a reasonable cost. Moreover, you’d be assured of instant upward scalability minus the cost overruns associated with building permanent infrastructure.
2. What the FinTech Startup Lacks in Expertise, It Can Overcome
For an in-house team acclimatized to small but incremental change, it becomes well-nigh impossible to transition to a DevOps model overnight. Through outstaffing, the startup gains a much-needed infusion of inspirational leadership coming with specialized skill sets. For example, while the startup is busy canvassing customers and churning the sales funnel, the outstaffing DevOps specialists can focus on building a cleaner, healthier code base, reducing the risk of bugs and merge conflicts, and eliminate the headaches associated with duplication of work.
3. FinTech Startups Benefit Through Performance-Enhancing Methods of Connecting Consumers and Providers
A dedicated team of outstaffing developers effortlessly integrates various applications components in a Service-Oriented Architecture (SOA) that unites products, vendors, and technologies in ways that improve the workflow, enhance the user experience, and stimulate customer delight.
4. FinTech Startups Transition From Human Intelligence to Artificial Intelligence (AI) to Scale Efficiencies
Outstaffing opens new vistas in AI and Machine learning that can be leveraged to improve payment schedules, create customized products, and increase the operational efficiency of business processes. Armed with AI, the startup stays one step ahead in innovatively responding to business opportunities.
5. FinTech Startups Position Themselves as Global Leaders Riding the Industry 4.0 Tsunami
The financial services sector is bang in the middle of a wave of automation and data management changes, or the fourth industrial revolution, commonly known as Industry 4.0. We’re witnessing a paradigm shift in the way IT systems are being built, developed, operated and run. IT outstaffing taps the expertise and skill necessary for FinTech startups to transition to digital platforms and build customized products to fulfill any level of consumer demand.
If You’re a FinTech Startup With Battle Lines Drawn, Here Are 6 Significant Ways Outstaffing Wins You the War
•You’re focused on creating a minimum viable product (MVP) to validate a brainstormed business idea, and you need expertise fast – Outstaffing provides the affordable solution.
•Handling complex technology and distributed programming demand highly qualified software developers that are expensive in your backyard – Outstaffing brings global expertise to your doorstep in an affordable way.
•Your startup is moving from local to global, and you’ll be handling a much bigger client base – The dedicated outstaffing development team guarantees the scalability and the flexibility that keeps you synced to changing customer needs.
•Your FinTech evolution demands adaptability to a wide range of technologies, something you’re not equipped to handle – the dedicated development team with FinTech project expertise will change your approach, modify the architecture you need, and be ready with advice on building your project from scratch, giving you a better shot at success.
•Transitioning from a local to a global provider of FinTech solutions isn’t easy; you need to fulfill industry and global standards. Europe is in the throes of data-protection regulatory changes. The new General Data Protection Regulation (GDPR) standards effective from 25th May 2018 are making it mandatory for FinTech startups to conform to legal frameworks that protect company data and prevent misuse and data theft. Dedicated development teams bring expertise in cybersecurity protocols and GDPR regulations that ensure your company stays on the right side of compliances.
•What happens if the industry niche that you are trying to disrupt becomes the disruptor that ruptures your dreams? This is a pertinent question because Blockchain has upended the financial services sector. Giving your FinTech applications the Blockchain treatment has the potential of rocketing you up the stratosphere. Financial services such as online wallets and instant money transfer, a faster processing and payment infrastructure, wealth management strategies, and consumer lending have been changed forever using cryptocurrencies – services that are easily handled through outstaffing.
When you’re outstaffing software professionals, finding the right team assumes critical importance. You’ll be needing developers that boast a solid grounding in FinTech software development; people you can trust to work intimately with your IT architecture. These are teams that will be working shoulder to shoulder with your in-house experts as you crunch solutions that are customized to your basic requirements.
The dedicated development team that is yours for the asking through outstaffing becomes your weapon of mass destruction to halt the onslaught of a disruptive market. By outstaffing expertise, you control change and don’t become a victim of change.
To get a lowdown on how outstaffing works and what dedicated developers can do for your startup check out the Techendo interview where the founders of FortySeven Software Professionals speak eloquently regarding the ins and outs of outstaffing the FinTech industry. More particularly, their take on a Venture Capital firm in FinTech from Israel, the startup destination the world looks up to.