While the market for fintech outsourcing is still in its infancy, it will surely grow in the coming years because of the advancements in mobile computing, big data analytics, and the increasing adoption of blockchain technology. So, what can fintech outsourcing do for your company and what kind of role will it play in 2018 and beyond?
What is FinTech Outsourcing?
FinTech, an abbreviated term for financial technology, is now deeply embedded in various segments of the banking and finance sector. Thus, it's only natural for fintech companies to outsource their business processes, including customer service and tech support, to service providers located in global markets where most of their customers live and work.
WeForum defines FinTech as "the innovative use of technology in the design and delivery of financial services and products." It serves multiple segments of the finance industry, which include lending, payments processing, financial advisory, and investment management. At its core, fintech has changed the way banks and companies interact with their customers. It has reduced end-user costs of transacting with these financial institutions and helped these institutions extend their services to underserved markets.
How Will FinTech Outsourcing Help Your Company?
FinTech provides great value to the banking and finance sector as well as companies in retail and ecommerce. It's already becoming the norm in global payments. For instance, customers can now use a virtual wallet app in their phones to pay for their in-store purchases. Some apps even allow them to scan the QR code or bar code for each item and process their payment through an interactive kiosk. No need for human cashiers!
Of course, humans aren't entirely eliminated from the sales process. While chat bots do well in answering simple questions, such as "When will my order arrive?", questions that go through several levels deep of decision-making are beyond the capability of the current state of AI technology. Plus, customers would much rather talk to a human representative from the company than a bot because they sought warm assurance that whatever problem they might have would soon be fixed by someone who truly understood their predicament.
At this point, quality customer service and competent tech support play key roles in vastly improving the customer experience. For small-to-medium-sized companies, outsourcing these business processes has given them the following benefits, according to research conducted by Deloitte Global as mentioned by TechBullion.
1. Costs have been reduced because some of the steps in the sales and payment processes have been eliminated and don't need to be maintained in-house.
2. Outsourcing their business processes has enabled fintech companies to focus on their core products and services.
3. Partnering with an outsourcing company has solved capability issues. This smart move has contributed to major enhancements in customer service for clients.
4. Bringing onboard an outsourcing company will often add intellectual capital to fintech firms. This will be critical to helping them adapt to the changing needs of the industry.
Other Areas That Outsourcing Can Serve FinTech Firms Better
Outsourcing companies that provide services beyond customer support can help fintech providers with big data analytics, social media optimization, data transmission and verification, and many others.
Another area is software and mobile app development, which would require a bigger team of engineers and data analysts from half a world away. Most fintech companies are considered startups, and they rarely have enough resources for a large team of in-house developers. Outsourcing their IT needs can help them fill in the gaps in their operational needs.
The global fintech outsourcing market will continue to grow as investments into financial technology firms continue to increase. In the blockchain segment of global fintech investments alone, the market size has been predicted to reach up to $7,683.7 million U.S. dollars by 2022. As more and more people rely on fintech services to serve their financial needs, fintech companies will have to adapt and become flexible by outsourcing their business processes.