FinTech companies are stealing IT talent away from the banking sector with fresh approaches to hiring and the perks associated with technology startups. These upstart financial applications companies have won market share by matching emerging digital capabilities with financial services traditionally served by banks and other established institutions.
Startups Offer Seductive Alternatives
Digital has changed the barriers to entry for financial services markets, enabling tech startups to leverage data that delivers new business insights and solutions; this growth has increased the demand for programmers with the skills to develop finance-related applications.
Although banks have the same opportunities and the bonus of capital to invest, FinTech startups are free from the limitations of mature and bureaucratic corporate cultures; they can channel creativity to develop new solutions. The tech-startup mindset delivers creative solutions quickly; this has tremendous appeal for talented and ambitious IT professionals seeking careers in the financial sector.
The traditional path to finance careers for IT professionals has long been through big and safe banking institutions. However, digital changes that dynamic as it continues to generate innovations, tempting more developers to take alternative positions in new ventures that are riskier but also more exciting, and with the potential to offer faster career progression.
FinTech Puts Pressure On The Financial Services Sector Recruiting
Startups are drawing IT talent away from the banks by providing financial and social incentives that the institutions have been reluctant to offer. Newly established companies offer a different mindset and cultures that value talent. Startups appeal to the natural human desire to be appreciated and valued for their abilities rather than stifling corporate conformity. The workplaces of startups tend to have relaxed and casual atmospheres, with flexible hours, casual dress codes, and team activities that make work more fun than in the traditional offices of banks.
Founders of FinTech startups may not be able to offer banker salaries, but they can provide some of the things that most motivate workers.FinTech companies can provide IT talent the allure of high future earnings and accelerated paths into executive positions, they give the promise of a fast-track pathway to the top, and the kudos of getting in early, whether or not that success materializes is another issue. This recruitment success has applied pressure on traditional institutions to respond. Banks are attempting to compete by copying the cultural elements of the cultures of the startups.
FinTech Competition For Talent Spurs Collaboration
FinTech startups are also competing by collaborating with established financial service providers and banks. While banks might prefer to develop digital assets in-house, the difficulty of hiring capable developers and the pressure to produce results has made them more willing to work in partnership with FinTech startups. On the other end, the startups can exploit partnerships with banks and the appeal to IT talent to create their opportunities to establish positions in the financial services marketplace.
Outsourcing FinTech Solutions Development Seems a Viable Option
In order to get funding and investors' buy-in, any startup should be able to present a compelling case and demonstrate how their project will disrupt the market and make a difference. FinTech solutions are rather complex and take advantage of most of innovative features pertaining to Cloud, Big Data Analytics, etc. As such, a solution's prototype development costs may reach and even exceed $50,000. Outsourcing FinTech development offshore / nearshore has the following benefits for startups looking for investors / test track:
- Outsourcing provider can help FinTech startups go from proof of concept (PoC) to a clickable prototype or even a minimum viable product (MVP) quickly and cost-effectively. If startup has no funding, they may negotiate a deal with a provider that can take a share of the company at later stages, due to the risk of financial loss.
- Open source is inexpensive, rather powerful and scalable. Therefore, many startups like it. The open source market is mature today and many outsourcing providers are equipped well to deliver a high quality code written fast. In addition, professional providers have powerful code libraries and may lower down your entire project development budget by using re-usable components.
- One of the major bumps in startup road is finding and attracting multi-talented specialists ready to join a startup that may or may not get funding and rock in the future. It makes a lot of sense to outsource non-core business functions such as software development testing, front-end development, UX/UI design to a provider with an available talent pool / good talent sourcing capabilities and save budget / time to market while having technology professionals take care of your software development functions.
- Keeping strategic roles in-house and outsourcing developer / tester jobs offshore / nearshore can help FinTech startups maintain their value proposition while improving the balance sheet. This can make startup more viable for VC funding, too.
To learn more about FinTech startups' first-hand experience with outsourcing, check out our interview with FIDO that leverages Ukrainian IT talent to change their legacy software and build a robust Big Data analytics solution.