How Software Development Outsourcing Is Transforming the Financial Industry

How Software Development Outsourcing Is Transforming the Financial Industry Photographs can be restored to life by digitizing them with the help of data conversion services, and then stored safely in a cloud storage facility

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Advancements in technology bring smart changes in the business environment and create more opportunities to develop new software solutions that ensure better efficiency and improved customer experience. But developing software comes with its own challenges. Outsourcing software development to a reliable business process outsourcing service is a great way to address this challenge and have the software applications you need. Software development is an overall process that involves various tasks like computer programming, documenting, repairing, and testing that are required for the creation and maintenance of applications and frameworks.

Today, the focus is on developing customized software to meet the specifics demands of clients.

Software outsourcing is an arrangement made by a business to hire a third party software contractor to do the software related work that could have been done in-house. Most organizations prefer the outsourcing model because in-housing software development requires more money as well as time.

Software development outsourcing helps businesses achieve

greater economies of scale and with every year it is gaining more popularity.

Why Outsource Software Development?

The financial industry is looking for new ways to serve the customers and provide them a better banking experience. This has made the financial service industry the leader in software development initiatives. Research shows that investments in financial technology, or fintech, reached $34 billion in 2018. New software developments are expected to revolutionize the payment methods, transactions etc. Banks and other financial institutions are now turning to outsourcing software development to third party services because these providers have invaluable experience in developing software for Fortune 500 companies. Outsourcing software development is transforming the financial industry with the following benefits: 

Easy access to experts: Outsourcing helps to find the right talent that can satisfy individual

software

development

needs.

Software

engineers

have

an

ultralow unemployment rate of just 1.9%. This candidate-driven job market means that more companies are competing to hire a limited number of experienced software engineers. However, many countries in Asia and Latin America have experienced software developers who can offer their service at affordable rates and collaborating with these outsourcing partners can yield many benefits.

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Quick completion of projects: Fintech companies are working with offshore software development firms to complete the projects in less time. Outsourcing software development provides access to a wide range of experienced developers who can help fintech companies finish the projects quickly and efficiently. Moreover, the type of multidisciplinary development teams favored by outsourcing companies allow for the rapid development of high-quality software.

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Increase in profits with data analytics: The financial industry has to engage in data collection and data analytics and big financial companies have data analysts who analyze data to reduce the risk of issuing securities, trading futures etc. Financial institutions are working together with BPO services by outsourcing software development to build data analytics software.

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Safety of valuable consumer data: Securing consumer data is one of the biggest challenges that the financial industry is facing with each American financial service firm withstanding an estimated 1 billion attacks every year. So, to ensure safety of financial data banks are outsourcing to reliable software development firms. Banks store highly sensitive data, including Social Security numbers, credit card information, salaries, purchase habits and home addresses. The US government has released specific rules and regulations for financial institutions and banks to secure their information. Implementing these rules and entrusting customer data management to a service provider known for their efficiency and integrity outsourcing could ensure safety of bank data.

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Less server load with cloud computing: The banking and finance industry has been reluctant to implement cloud computing. Today, banks have started using cloud computing to ensure data privacy and protection. Banks and financial organizations can store information offsite with a third party through a software-as-a-service (SaaS) arrangement. Research studies show how those banks are cutting technology costs by 25% by using cloud computing, saving more than $15 billion.

Growth of Software Outsourcing 2019- 2026 

Global software as a service market is expected to rise to an estimated value of USD 272.70 billion by 2026, registering a healthy CAGR in the forecast period of 2019-2026.

According to a study by Computer Economics, big organizations have increased the

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percentage of their IT budgets spent on outsourcing from 6.3% to 8.7% in 2019.

Medium-sized organizations have also increased their budgets from 4.7% to 6.5%. The use of software development outsourcing helps companies minimize costs and get their products to market faster and the study shows that companies large and small are taking advantage of this trend. 

Global software outsourcing market report 2019 encompasses the software outsourcing market as well as provides a comprehensive analysis of every factor related to the global software outsourcing market. The report includes the study of historical and present state of the market and has provided a valuable forecast for market size, share, growth, sales volume, and revenue.

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The report has segmented the software outsourcing market into two parts - infrastructure outsourcing and application outsourcing. The top vendors of software outsourcing market are Accenture, HCL technologies, Oracle, Cognizant, Infosys, HPE, Neusoft, and Sodexo.

Consumers are now engaging in banking operations mostly via their mobile devices. They also use the internet to buy products and make payments. Therefore financial institutions need to make use of the best payment solutions to meet customer demands. Outsourcing providers help them handle the challenge of interoperability between legacy and proprietary systems, payment management and processing as well as tracking and auditing.

Financial organizations need a specialist in the industry in payment solutions and other niche markets as an outsourcing partner. By partnering with business process outsourcing companies, financial entities can make sure that they get the best professional programmers and IT experts who can satisfy their specific requirements and ensure top quality services.

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