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The Ultimate Guide: Outsourcing Financial Software Development in 2023

(17 min)
Peter Shubenok
Managing Director
Ultimate guide Outsourcing financial software development in 2023

Nobody can deal without digital banking services anymore. People pay for subscriptions, order goods online, cover their bills, and send money to relatives – all from the comfort of their smartphones. Banking evolves with the growing tech-savviness of users and has no way back to the traditional bank offices and queues. 

FinTech is here to stay, as the skyrocketing investment figures suggest. Only in 2021, the market cap of the FinTech industry exceeded $112 billion, and the expected market size by 2028 is over $332 billion, according to Vantage Market Research

FinTech market size, 2021 to 2028

This figure suggests that FinTech is the mode of financial service delivery of the future, with small and large companies relying on Artificial Intelligence, Machine Learning, and advanced data analytics in their financial service setup. 

If you’re the one considering digital transformation in the coming year, it’s probably the right time to think about tech outsourcing. 

To which company can you entrust your outsourcing financial software development? How will you choose a reliable provider? This article covers all the basics of FinTech outsourcing in 2023 to let you make wise, informed decisions.


What Is Outsourcing? 

It makes sense to define outsourcing before continuing its discussion in more detail. 

In a nutshell, outsourcing is the practice of delegating the full IT software development project or its part to a team working beyond your in-house staff. This team may be located nearby or on another continent; the key point is that it operates remotely. 

You organize remote collaboration between the in-house and outsourced teams to achieve the project’s completion and integrate it into your in-house IT infrastructure.


Onshore vs Nearshore vs Offshore

IT outsourcing can be organized following a variety of models. They depend on the team’s physical remoteness from your headquarters and on the type of assistance you need from the outsourcing provider. In terms of location, you can choose from the following: 

  • Onshore outsourcing. This option involves hiring a company to produce software for your business needs within your country. Companies choose this variant for many reasons, including the absence of a relevant tech stack, lack of time for full-time staff recruitment, or the need to close small project tasks. 
  • Nearshore outsourcing. This option means delegating the software development project to a company located in a neighboring country or region. The variant is convenient for many companies, as nearshore outsourcing providers can charge less than local agencies while at the same time remaining in a convenient time zone and physical proximity.   
  • Offshore outsourcing. The offshore model presupposes outsourcing the IT project to a company far from your business. For instance, if you’re a North American company, you can outsource development to Asian companies, Eastern Europe, or India. This variant is less convenient in terms of language, time zones, and cultural fit, but it’s usually the most cost-efficient.


Relationship-Based Outsourcing Types

In terms of the work scope and outsourced team’s involvement, you may opt for various relationship-based models: 

  • Outstaffing. This variant usually involves hiring one or several specialists from the outsourcing agency’s team who work on the client’s project under the in-house Project Manager’s supervision. Depending on your current project needs, such augmented teams may be scaled up or down. 
  • Project-based work. You may need a team with a specific tech stack to complete a particular project. In this case, you hire an outsourced team that completes the project from scratch and conducts all project management activities as well.


Pros and Cons of Outsourcing Software Development

Outsourcing has risen in popularity with the spread of the Internet and the expanding opportunities for remote communication and collaboration. Many financial companies have seen a remedy to high local development costs in this model of software development. 

However, outsourcing is not universally suitable for everyone. It comes with specific downsides you should consider before making the hiring decision. Here is a quick intro to outsourcing software development pros and cons.


  • Costs. You can reduce development costs by finding an affordable yet competent financial software development agency overseas. Outsourcing is a great way to minimize overheads and save funds on lengthy and expensive in-house staff recruitment. 
  • A wide range of experts. Companies that outsource software development aren’t limited to their local providers’ tech stack. They are free to choose from the immense pool of qualified programmers and designers worldwide. 
  • No need for staff recruitment. You also save time on recruitment, thus attending to the core business tasks and improving your financial business performance. 
  • Scalability. Businesses that outsource IT-related tasks are more flexible in terms of scaling via team augmentation and outstaffing. No need to spend weeks to close a talent gap; the outsourcing provider can do it quickly and without friction.
  • Ready-made SDLC. Outsourcing a software project frees you from the need to establish software development workflows, hire and manage teams, etc. You can work with different providers depending on the current market trends, dominant digital banking technologies, and your customers’ needs.


  • Project management risks. Working with a remote team always means giving away an important part of its operations. Thus, if your financial company fails to keep the outsourcing provider in control, the project may fail or be severely delayed.
  • Different time zones. A remote team works separately, in most cases in a distant time zone. Thus, you may find it hard to communicate with the coders effectively and organize overlapping working hours to ensure consistency between your in-house and remote teams’ activities. 
  • Motivation. Remote teams are not as motivated and committed to your business success as an in-house team. Thus, they lack the project’s sense of ownership and may produce mediocre results. 
  • Difficulty of control. You can’t oversee every involved developer’s work process, as remote teams may be scattered across several locations and time zones. In most cases, outsourcing a team’s work becomes a matter of trust only, with little ongoing performance oversight. 
  • Documentation practices. If the outsourcing company has poor documentation practices in place, you may find it hard to locate the flaws and bugs in the intermediate product’s code. This failure may lead to more serious product flaws and costly revisions at the end of the production process. 
  • Security issues. Outsourcing teams get vital access to your sensitive corporate data, and you may be unable to control its privacy protection. Thus, critical business secrets often leak to competitors or get open access because of the outsourcing company’s reckless data treatment.

Though the cons we’ve just discussed may seem intimidating to you, the best remedy against them is the right choice of provider. 

Here is a brief visual illustration of all the pros and cons of outsourcing, see the infographics below.

Pros and cons of outsourcing

Four Reasons to Opt for Software Outsourcing 

Financial software outsourcing can become problematic with non-reliable teams, but if properly organized, it can become your life savior in many business situations. 

You may resort to outsourcing if you need to: 

1. Do things quickly

A software project needs a large team to emerge. You should have UI/UX designers, engineers, and developers on your staff, together with a business analyst, QA tester, and project manager. 

Not every company has the entire staff on board, thus requiring lengthy recruitment and interviewing procedures. 

Why stretch your financial company’s resources if you only need one software product? In these cases, outsourcing is a great option to minimize the time to market and avoid full-time staff hiring. 

2. Close talent gaps

You may have an internal software development team, but your innovative financial software product might require a specific tech stack that your staff lacks. 

You may either hunt for that exclusive tech expertise for several months or partner with an outsourcing agency to “rent” that specialist using the team augmentation model.

3. Save money

Planning a new software project from scratch, you may see that it costs too much for your startup to handle. It makes sense to hire a remote team instead to save on the full-time staff recruitment. 

That team may also be entrusted with 24/7 support, maintenance, and updates of the software they created, thus relieving the burden of software management from your in-house staff.

4. Develop a secure product

Cybersecurity is the pressing priority for all software projects today, including FinTech. The data breaches and hacks of popular apps and platforms have drained $3+ billion from businesses and their users in 2022. 

You can’t take the risks of launching a mediocre product to the digital market; it can drown your reputation and kill your business with a single hacker attack. We recommend working with top-rated outsourcing agencies with qualified cybersecurity engineers on board, thus ensuring that your product comes with enterprise-level protection. 

If you find your company in any of these four situations and want to close a software development project with minimal costs and downtime, it’s time to seek a software engineering team’s consultation.


Welcome to the World of FinTech Outsourcing 

FinTech outsourcing is the new normal of digital businesses, as all of them are pressured to provide better financial services to their customers while at the same time cutting fees and ensuring end-to-end security of transactions. 

All these goals are attainable with FinTech solutions. But is there any sense in hiring a full-size in-house team for one or several FinTech products? This solution may cost your business too much to survive.

So, outsourcing FinTech development is a wise approach to staying competitive and technologically superior without breaking the bank. 

This solution is universal for all kinds of businesses, small and large, as any entity can derive its unique benefits from FinTech outsourcing. 

Read on to see how small, mid-sized, and large financial organizations may take advantage of outsourcing possibilities.

Startups and Small Businesses 

Startups usually only start out, so they don’t have any FinTech solutions yet. Such businesses should hire a FinTech outsourcing team that can complete a discovery phase and conduct thorough market research to refine the business idea and make it marketable.

Proper niche selection and stunning design also play a vital role in a startup’s positioning. Thus, it’s vital to find a reliable partner with which your company can stay for a long time. 

Medium-Sized Businesses 

Medium-sized businesses may have already carved a market niche for themselves, but they may also have no FinTech solution or only an MVP that requires further development and refinement. It would be unwise to spend a meager business budget on new staff recruitment if it’s possible to outsource the development task to a remote team. 

Medium-sized companies can engage their in-house staff in the core tasks of business strategy development, while an outsourcing company will work on the practical solutions.

Large Corporations 

All businesses are pressured to evolve today, and well-established corporations are no exception. Though large, enterprise-level businesses usually have a large IT department in-house, they may still benefit from FinTech outsourcing in many ways. 

Their loyal customers expect better services, safer financial solutions, and ultimate user-friendliness. More innovative and agile FinTech companies can help corporations with legacy system innovation and IT process automation without expensive new staff recruitment. 

Besides, FinTech outsourcing agencies possess the innovative tech stack and expertise large companies may lack, so the latter can close their talent gaps without investing extra money in new full-time staff. 


Products that FinTech companies can outsource

When talking about FinTech outsourcing, you might be worried about the types of solutions appropriate for outsourcing. Which software can be built remotely, and which is suitable only for in-house production? 

The most popular types of FinTech outsourcing cover:

  • eWallets and mobile banking. You may outsource the development of an e-wallet and mobile banking solution to an outsourcing provider and get end-to-end transaction coverage for your business. This way, you save on in-house wallet development costs and guarantee your customers enjoy safe, user-friendly solutions.  
  • Trading apps. Trading has become immensely popular among retail investors, so trading apps meet the users’ needs for rich data analytics, intuitive dashboards, and a rich set of real-time trading data monitoring tools. 
  • Lending automation. Lending businesses can make decisions quicker and process customer applications in seconds due to smart credit scoring and loan processing technologies. 
  • Payment systems. Your customers will enjoy quicker checkout, customized loyalty rewards, and secure payment procedures built with their needs in mind.  
  • Blockchain services. Blockchain-based payment processing is the new trend in the FinTech industry today, so an outsourcing provider can build a safe and technically superior blockchain payment service for your business. 
  • API integration. No need to build all financial solutions from scratch if you can access a vibrant ecosystem of ready-made FinTech products via safe API integrations.

Financial businesses can outsource literally any software project they need, be it a full-scale payment app, compliance software, or a security monitoring tool. 

The main point is to deal with reliable, trustworthy providers of FinTech outsourcing solutions that can deliver high-quality software, communicate effectively, and treat your business data with proper respect to privacy and confidentiality standards. 


How to Choose an Outsourcing Software Development Team? 

Choosing a software provider is a critical factor in your success. Once you find a reliable, qualified outsourcing agency, you can enjoy smooth and frictionless collaboration and a top-rated FinTech product. 

Here are some pro-tips for choosing a great software development team. 

Focus on The Team’s Domain Experience 

As mentioned above, software development is a versatile field, and companies can rarely specialize in all types of software equally well. 

You need to pick a provider with a proven track record in the FinTech area. Check the company’s completed projects, look at how they work, and talk to previous clients who ordered FinTech outsourcing from it. 

These efforts will pay off, as you will be 100% sure you’re paying a FinTech expert. 

Work with Companies Meeting Your Budget 

Clarity and precision of budgetary calculations are at the heart of any successful cooperation. 

You need to be perfectly sure about how much money you can spend on FinTech software and check whether your provider is ready to deliver services within that budget. Also, you should check the provider’s pricing policy to ensure there are no hidden fees. 

Otherwise, you may get stuck in the middle of the development process without any hope of finalizing the project on time.

Study the Company’s Reputation 

You should check the company’s reputation online and do some due diligence with the provider’s previous clients to double-check its integrity. 

There’s nothing better than talking to other customers, as they will provide first-hand experiences and feedback to inform your decisions. 

Look Through Its Portfolio 

Checking the style, technical execution, and approach of your potential provider is key before signing a contract. 

That’s done the best way with the help of the company’s portfolio, showcasing all completed projects.

Establish a Partnership 

A final tip is to look for a long-lasting relationship instead of a one-time task. 

This way, you can enjoy better staff motivation and better quality of service, as the outsourcing provider will know that your business success is directly related to their revenue and long-term partnership.


Models of cooperation 

Before making arrangements with the outsourcing provider, you should agree on the contract type you will sign. Three primary models of cooperation (and their mix) determine your collaboration’s outcomes. 

  1. Fixed price. You can agree with the provider on a fixed price for the project if all its details are clarified, and the scope is well known. Once such a contract is signed, no amendments to the initial requirements are possible; they come at an extra fee. 
  2. Time and resources. This contract is more flexible, as you pay for the time coders spend on your project (mostly at an hourly rate). You can determine the coders’ workload and set the financial cap on the work they do. 
  3. Dedicated team. This approach is a turnkey solution for projects of any size and scope. The outsourcing provider compiles a team with all the needed experts to complete your project from scratch. You pay for the team’s time and the agency’s administrative resources used to manage it.
  4. Hybrid model. You can mix the features of all three models discussed above in the way you find appropriate and negotiate a custom price with the provider.

You can learn more about various cooperation models in IT and their peculiarities in our article. 


Stages of Outsourcing Software Development 

As a rule, the software development provider follows a fixed set of stages to complete your project.

They are as follows:

  1. Discovery (Planning). You come to an agency with a business idea, which is usually vague and requires a reality check. The provider’s business analysts analyze the market, determine the existing competitors, and check your idea’s marketability. The project’s detailed planning takes place at this stage as well. 
  2. Prototyping and Design. Once all details and project features are clarified, the product’s prototype and tentative design are created to seek the client’s feedback and test the idea with visual presentations.  
  3. Development of Software. After the prototype’s check and revision based on client and user feedback, the actual software development process starts. The team creates the product’s back-end, front-end, and unifies the code into working software. 
  4. Testing. The product’s code is tested (manually and automatically) for bugs, vulnerabilities, and inconsistencies to ensure its end-to-end intactness to breaches and hacks.
  5. Maintenance and Release. After the QA check is over, the product is released to the end users. It may be maintained and updated by the outsourcing provider on demand.


Cost Breakdown for Outsourcing IT Projects 

There is no one-size-fits-all approach to financial software development cost estimation. All projects are different, and the cost is calculated for every project individually. The price you will pay usually depends on the following:

  • The team’s location 
  • The underlying technology 
  • Number of features 
  • The project’s overall complexity 
  • Deadline 
  • The team’s size

A FinTech project ordered in Asia may cost you $25-40 per hour. Western Europe’s coders charge $45-90 per hour, and Latin America’s programmers charge $30-50 per hour. 

Ukrainian coders’ work usually costs around $40 per hour, and the most expensive locations for FinTech software development are Canada ($50-150 per hour) and the USA ($70-200 per hour). 

If you want a precise cost estimate for your FinTech project idea, welcome to RNDpoint for a free quote. 

Depending on the number of features your FinTech app will include, you may need to pay for 2,500-3,200 hours of development. So, the average FinTech project cost may range from $120,000 to $160,000 (with an average hourly rate of $50 for FinTech coding services in mind). 

Please find a comparative table with various FinTech app types’ costs in various geographical locations.

FinTech app types’ costs in various geographical locations

Why Choose RNDpoint? 

2023 is a year of further FinTech adoption and transformation of financial services globally. To be successful in your industry, you should follow the market and transform your financial services with FinTech trends in mind. 

RNDpoint is ready to help you in this transition, as we’ve been at the forefront of FinTech development since 2014. 

Our experts know how to make a true match between your unique business structure and advanced FinTech service infrastructure. Use our full-cycle FinTech software development services to grow quickly and embrace cutting-edge market trends for ultimate customer satisfaction.


Final Word 

FinTech adoption is in full swing, and only businesses delivering innovative, reliable payment services can survive in this competitive market. 2023 is an ideal time to embrace the FinTech trend and join the high-tech market landscape with efficient payment gateways, online payment solutions, and secure POS software. 

Finding a reliable, trusted vendor of FinTech product development outsourcing can secure your position in the market and treat your customers to technically superior, affordable, and safe payment services. That’s a winning combo for sustainable market advantage and your scalable business growth in synergy with the evolving FinTech universe.


What is outsourcing developing?
How to successfully outsource software development?
Which of the following is the least common reason why companies outsource?
What are the top regions for software development outsourcing?
What are the pros and cons of outsourcing development?


Peter Shubenok
Peter Shubenok
Managing Director
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