Fintech companies: agile and secure development by nearshoring

In the rapidly evolving fintech industry, companies are constantly seeking innovative ways to stay ahead of the competition and drive growth. One such solution that has gained traction is nearshore resourcing.

With its cost-effectiveness, specialized skills, scalability, and faster time to market, nearshoring has become a game-changer for modern fintech companies. But what exactly is nearshore resourcing, and how can it unlock the power of innovation and success in this highly competitive fintech sector?

In this blog, we will delve into the world of nearshore resourcing in fintech, exploring its benefits and uncovering the secrets behind its popularity.

Key Takeaways

Compliance and security are the main pillars of the fintech sector. By having a trusted nearshoring partner, fintech companies enjoy agile outsourcing without security risks.
Nearshoring in fintech offers significant cost savings compared to onshore development, with potential savings of up to 60%.
Nearshore locations provide access to a large pool of skilled software developers, ensuring access to specialized skills.
Collaboration with nearshore teams in similar time zones allows for real-time communication and faster project delivery.
Nearshore resourcing enables fintech companies to focus on core competencies, reduce time and costs associated with recruiting and training in-house teams, and access a diverse talent pool.

Nearshore resourcing in fintech: an overview

Nearshore resourcing has emerged as a strategic model for fintech companies seeking to innovate rapidly while managing costs effectively. The fintech sector, characterized by its need for agility, compliance, and security, benefits from nearshoring by gaining access to specialized talent in similar time zones, facilitating real-time collaboration and quicker turnarounds.

Proximity reduces cultural barriers and improves communication, essential for developing complex financial technologies that must adhere to strict regulations. Nearshoring also offers scalability, allowing fintechs to adjust their workforce quickly in response to the industry’s dynamic nature while maintaining high-quality standards and intellectual property protection.

Fintech as a Service - Market growth projection — Source: Global Market Insights (https://gminsights.com)

Why fintech companies choose nearshore resourcing?

Fintech companies especially, opt for nearshore resourcing due to the numerous benefits it offers, including cost savings, access to specialized skills, scalability, faster time to market, and enhanced innovation.

Agile development combined with compliance and security
Fintech thrives on agility, ensuring rapid adaptation while maintaining strict compliance and robust security to protect sensitive data. With the trusted nearshore partner, you have fast access to a large pool of audited and trustworthy developers.
Cost savings
Nearshore resourcing allows fintech companies to reduce development costs significantly, as nearshore locations often offer lower labor costs compared to onshore development.
Access to specialized skills
Nearshore locations provide access to a diverse pool of specialized software development skills, allowing fintech companies to access specific expertise that may not be readily available in their local market.
Scalability
Nearshore teams offer the flexibility to scale up or down based on project requirements, enabling fintech companies to quickly adjust their resources to meet changing demands.

Nearshoring vs. offshoring – what’s the difference?

To optimize their development processes and drive their competitive advantage, fintech companies can leverage nearshoring to enable agile development methodologies. Agile development strategies focus on iterative and collaborative approaches, allowing for faster and more efficient software development cycles. Compared to offshore, nearshoring offers several advantages for companies seeking to implement agile practices.

Nearshoring	Offshoring
Proximity to the home country enables real-time collaboration and faster decision-making.	Time zone differences may cause delays in communication and decision-making.
Cultural compatibility facilitates seamless integration and collaboration.	Cultural differences often lead to communication barriers and misunderstandings.
Access to a similar work culture and language proficiency improves team dynamics.	Language barriers and cultural differences may hinder effective team collaboration.

Maximizing the time zone advantage

With the distinct operational tempo of the fintech sector, leveraging nearshoring for agile development demands a nuanced approach to time zone management. Here are three targeted strategies specifically tailored for fintech companies aiming to optimize their nearshore engagement:

Benefit from overlapping work hours
Schedule overlapping hours that are conducive to synchronizing the fast-paced and security-sensitive operations typical of fintech projects. This facilitates immediate dialogue on complex financial algorithms or compliance updates, ensuring swift resolution of issues and a more dynamic development cycle.
Utilize asynchronous communication
Adopt asynchronous tools that support the unique demands of fintech product development, like secure version control systems and encrypted messaging platforms. This allows for uninterrupted innovation cycles and risk assessment processes, which are critical in a regulatory-heavy industry, even when teams are not working simultaneously.
Establish clear communication protocols
Define communication norms that consider the sensitive nature of financial data and the urgency of market-driven fintech solutions. Ensure all team members are aligned on secure practices for sharing information and are aware of the expedited response times required for market-reactive decision-making.

Schedule overlapping hours that are conducive to synchronizing the fast-paced and security-sensitive operations typical of fintech projects.

Cultural compatibility in nearshore resourcing for fintech

Cultural compatibility plays a significant role in the success of nearshore resourcing for the fintech sector. We listed five key points highlighting its importance and how it manifests in this industry:

Understanding of financial regulations

Nearshore teams often have a better understanding of the financial regulations that are crucial for compliance in fintech operations. This knowledge is invaluable when creating products that meet legal and industry standards.

Alignment of business hours

The alignment of business hours between the nearshore team and the client is also significant. It facilitates real-time collaboration and communication, which is essential for the agile development practices that are typical in fintech projects. Quick response times and the ability to address issues as they arise help maintain a steady pace of development and innovation.

Shared economic context

Shared economic context is another advantage of nearshore resourcing in fintech. Teams from neighboring countries are more likely to understand the economic conditions that influence the fintech sector, leading to product features and services that are more relevant and finely tuned to the market’s needs.

Language and communication

Furthermore, language and communication ease due to cultural compatibility cannot be overstated. When nearshore resources share a common language or have high proficiency in the client’s language, it significantly reduces the potential for misunderstandings and streamlines the development process.

Cultural proximity in business practices

Lastly, the proximity of cultural and business practices greatly benefits project management and negotiations. As the fintech industry relies heavily on trust and user understanding, having a nearshore team with similar cultural values can enhance these aspects, leading to more successful products and services that align with user expectations.

Financial regulations in EU. — Financial regulations in the EU can be a word puzzle. Shared financial regulations with the nearshore team make working with legal and industry standards easier.

Which are the leading fintech companies that successfully nearshored?

Revolut

Revolut, a British fintech company, has successfully nearshored part of its software development operations. They expanded their development team by nearshoring to various Eastern European countries, such as Poland and Lithuania, where they have set up offices. This strategy has allowed them to tap into a large pool of tech talent while maintaining close geographical and cultural proximity, facilitating easier collaboration and communication.

Klarna

Klarna, a fintech giant known for its smooth payment solutions, strategically nearshores software development to maintain agility and innovation. Leveraging global talent, they optimize costs and enhance product development cycles by collaborating with proximate, skilled developers who align with Klarna’s customer-centric, tech-forward ethos.

Conclusion

In conclusion, nearshore resourcing in the fintech industry offers significant advantages such as cost savings, access to specialized skills, scalability, and faster time to market. The nearshore resourcing model is compatible with agile development methodologies and provides a time zone advantage, cultural compatibility, cost-effectiveness, and scalability.

By leveraging nearshore resourcing, fintech companies can unlock faster growth, innovation, and success in a highly competitive market.