Can fintech companies reduce development costs without sacrificing quality?
It’s no secret that the fintech industry has gone through a rough spell over the last couple of years. Inflation and the cost of living crisis have tightened the purse strings of not just consumers but investors too, with S&P reporting a 49% drop in fintech funding in 2023.
At the same time, consumer standards are sky-high. Net promoter scores for fintech services consistently score a mere 60%, revealing the combined risk of losing customers and the opportunity to rise to market leader position.
This combination means fintech companies are increasingly being asked to deliver more with less.
– more data
– more insights
– more releases
– more advanced features
– more performance from their services.
All while reducing development costs. That’s a challenge for any company, but the fintech industry has two extra complications to this challenge — maintaining quality and security.
Why fintech companies are uniquely disadvantaged
Fintech-specific roles like Quant developers are more costly than most typical developer positions ($196,161 a year versus $144,336 for a software developer). This is a combination of specific technical and industry knowledge along with the high demand for those positions among rivals.
Security and compliance increase costs further. Making sure everyone follows the required standards and operates securely takes time and resources. As does obtaining certification (e.g., ISO 27001) to prove your product or service is compliant. Someone has to pay for it, and that someone is always you — one way or another.
But these challenges are not impossible to overcome. It is possible to keep (and even raise) your development standards while reducing your overheads. The key? Choosing the right offshoring partner.
The smarter way to scale
For the last 10 years, The Scalers have honed their unique and high-quality way to build and scale offshore teams, including for some major clients in the fintech industry. The key difference is that clients build and manage a team as they would a local one, but The Scalers handle all the heavy lifting on the ground (hiring, office space, procurement, HR, payroll, engagement, building culture, training, etc,).
By hiring from the rich talent pool of Bangalore in India, The Scalers can find experts with niche skills, the right cultural fit and cheaper than clients would pay back home. For example, experienced Quant developers are on average 40% cheaper than in London. It’s sometimes called the “Silicon Valley of Asia” due to the 2 million plus employees in the tech sector and more than 400 R&D centres including fintech giants like PayPal, Paytm, Intuit, Visa, Wells Fargo, Razorpay, Stripe, and Wise. So previous industry experience isn’t a challenge.
They get to work on a product they are interested in, at a company they feel part of, and with a dedicated chief happiness officer who looks after their every need outside of their day-to-day engineering work. Meanwhile, clients get dedicated employees who stay twice as long as industry standards — an industry-low attrition rate of 11% — and can make significant reductions in their development costs.
Cheaper or short-term engagements can be a quick fix, but a great product requires dedicated high-quality engineers. The Scalers offer the quality, security, integration, retention, and people-first culture to make that happen.
Preqin scales in Bangalore
When The Scalers first partnered with Preqin — the market leader in alternative assets data and insights — they were looking for a couple of Scrum teams to relaunch their flagship product. They needed a dedicated team with complete oversight to ensure the quality and security of their service.
The Scalers’offshore model, along with their ISO 27001 certification meant they could be trusted to establish a quality, secure and compliant team.
After a few months, the quality of the talent The Scalers found for them convinced them to expand their R&D team in Bangalore adding additional teams of engineers. Then, they decided to see if they could find data specialists to expand their DataOps team.
In the end, Bangalore became their largest office with more than 450 employees in a dedicated office building we found and furnished for them. And once The Scalers had helped them establish their own entity in India, Blackrock acquired them for $3.2 billion. According to their executive vice president, global head of operations, partnering with The Scalers was the best decision of his career.
Not an isolated case
Preqin isn’t the only financial partner The Scalers have worked with that has discovered the value of Bangalore. Partners like Mediolanum, Allpay, Sigtech, Planet Payment – and others – found that The Scalers could get, retain and engage the fintech talent they needed at a price they couldn’t resist. This has enabled them to increase their development velocity in a cost-efficient way across various sectors, including trading, investment, asset management, and VAT compliance.
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