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How to Outsource FinTech Application Development in 2023: A Comprehensive Guide

8 min read

Hi there!

Are you a startup founder, a project manager, or a serial entrepreneur with a desire to own a FinTech product?

If so, continue reading as we will discuss the intricacies of outsourcing FinTech app development.

Other questions that will be answered in this article include:

  • What is FinTech app development outsourcing?
  • What are the reasons to outsource FinTech app development?
  • What is the cost of outsourcing FinTech application development?
  • How to choose an outsourcing agency?
  • And more!

Let’s elaborate on this further in the article. In case you have doubts about the relevance of the article, the information has been updated for 2023.

If you prefer visual to text, then go straight to the bonus infographic “Outsourcing Fintech application development from scratch”.

What is Outsourcing for FinTech App Development?

Outsourcing FinTech software development stands for hiring a software development company outside your startup or business to design and develop your FinTech product.

Let’s take a closer look at the different models of outsourcing services.

Outsourcing Model 1: Location-Based

This outsourcing model is a very straightforward one.

As its name suggests, it entails sourcing for a FinTech app development agency in specific locations. This model focuses on your outsourced team’s proximity.

We can single out three main types in the outsourcing model.

Type  Description
Local outsourcing This model involves partnering with a development agency within your locality or country.

For example, the US-based financial institution outsourcing an InsurTech project to the US-based development agency.

Nearshore outsourcing This type of outsourcing involves hiring a FinTech development team within your neighboring country of operation.

For example, the US-based startup outsourced its FinTech project to a Mexican agency, that provides software development services.

Offshore outsourcing In this type, a startup hires a development agency in a non-neighboring country.

A case study is the US startup outsourcing to a Ukraine-based FinTech software development company.

This image shows the first FinTech application development outsourcing model based on the location of the development team.

Outsourcing Model 2: Cooperation Type

The cooperation type outsourcing model deals with the relationship between an outsourced software agency and a startup in the FinTech market. This model can be split into two distinct types;:

  • Build a dedicated team
  • Project-based cooperation.

Check the spreadsheet below for more information.

Type  Description
Dedicated team A company expands its in-house staff by outsourcing IT specialists (usually, a few specialists at once) temporarily.

This model helps a team to maximize the efficiency of an in-house team while tapping into the pool of expertise of a development agency.

Project-based In this model, the software outsourcing partner is tasked with managing the entire technical or business process per some predetermined specification
This figure shows the second model of the FinTech application development outsourcing process, which is based on the type of collaboration

What are the Reasons to Outsource the Development of Fintech Software?

Let’s discuss the benefits you’ll get from favoring an outsourced mobile application development company over an in-house team.

 1. Cost Reduction

Outsourcing FinTech application development is, first of all, a much cheaper option than developing with a local company or creating an in-house team.

In numbers, outsourcing is 2-4 times cheaper. The exact amount of savings depends on many factors, but the main ones are the complexity of the application, the technical stack, the technical level of the developers, and the location of the team.

Thus, the average cost for FinTech application development in the U.S. is $200 per hour, while in Ukraine it is $50.

If we consider a cheaper option with hiring an in-house team, then we have to take into account all the indirect costs, in addition to salaries: taxes, accountant services, office rent, equipment, and so on.

To estimate the difference in person, you can use a developer salary calculator or an app development cost calculator.

 2. Gain Access to World-Class Resources

As a startup, experience is key in creating a trustworthy FinTech app that can deliver on your goals.

Most software development agencies are made up of professionals with a gamut of experience creating a wide range of applications. Thus, outsourcing FinTech mobile app development opens up your startup to a variety of experts. Their expertise can then provide you with deep insight into some tips and tricks to make your software product stand out.

 3. Save Time on Hiring Specialists

Recruiting in-house developers is a time-consuming activity. From advertising a position to sorting out resumés, and conducting interviews, your overall time-to-market can take a year. Onboarding your team and finally gathering the required tech stacks can also take time.

Thus, it’s a time-wasting option for founders that desire quick delivery.

Deciding to outsource the FinTech development activity helps your operational procedure as you simply identify a reliable agency and agree on a price and suitable time frame.

 4. Speed Up Development

Another merit of outsourcing over in-house is that the actual product development activity is very fast.

A recent survey by Deloitte shows that startups see a competitive advantage in outsourcing as it prioritizes emerging technologies and drives innovation.

Since the software solutions agency has a highly experienced team, they’ll have an apt understanding of the intricacies of adapting their tech stacks in a smarter and faster way.

From the discovery phase, all through to the app launch and maintenance, the team’s experience synergizes faster to give you desired deliverables.

Now that you know the merits of opting for an outsourcing agency, let’s help with location-based cost estimates.

This picture describes the main benefits of outsourcing Fintech software development

What is the Cost of Fintech Software Outsourcing?

It’s a known fact that labor laws in the FinTech industry and living standards in specific locations affect the prices of FinTech services.

This holds true even for FinTech mobile software development as creating apps through outsourced agencies based in certain parts of the world is generally more expensive than others.

Below is a spreadsheet depicting the different cost comparisons of FinTech applications based on location:

Type of app The USA, $ Ukraine, $ India, $
Banking app 500,000 125,000 65,000
Investment app 180,000 45,000 25,000
Consumer finance 240,000 60,000 30,000
Insurance app 300,000 75,000 40,000
Lending app 270,000 68,000 34,000

The price and location shown in the table above are self-explanatory that location is an important cost factor to consider before outsourcing.

The cost of developing a financial technology app in the United States can best be described as exorbitant. For most FinTech companies, a cheaper alternative is opting for a Ukrainian development team with a vibrant portfolio.

However, an even much cheaper option is contracting an Indian outsourcing development agency. A major disadvantage with India-based software developers is that their apps are often considered low quality and prone to hacks.

A popular myth among startup founders is that U.S-built apps often fare better in the market than those created elsewhere. This is not true, as you’re probably just overpaying for simple tasks.

Now that you have a cost estimate of FinTech app development. Let’s discuss the steps needed to decide on the right outsourcing agency.

This picture shows the components that affect the cost of FinTech app outsourcing development

How to Identify the Right Outsourcing Development Company?

The procedures for choosing the right outsourcing service are somewhat elusive. As a newbie, your outsourcing process should adhere to this checklist:

  • Identify your goals
  • Check the internet for an agency with extensive digital footprints
  • Check through their portfolio and read reviews
  • Share your idea with the development agency
  • Discuss on modalities of the project
  • Organize a test task
  • Finalize the deal

However, this is a pretty succinct checklist. So we’ll help you with a descriptive guide of a step-by-step procedure that’s easy to follow.

Step 1: Do Your Research

Devote extensive time to researching the right agency for application development before you decide. Even when you feel certain, you must carry out much deeper research by reading reviews and checking the authenticity of those reviews.

Center your research on the following:

1. Your Startup’s Goal

Extensive research without a clear goal in mind is synonymous with embarking on a journey without a destination. FinTech companies can discuss with in-house decision-makers of your startup and create a checklist of expected goals you want the FinTech application to achieve.

2. Search for the Desired Development Agency

Your startup’s goal helps to guide your search intent. For example, if the platform you’re developing requires cryptocurrency, then be sure to streamline your search to a development service provider with knowledge of blockchain.

There are many ways to search: you can do this on a reliable search engine platform like Google, find an agency from listings, leverage the networking power of LinkedIn, or surf through freelance platforms.

3. Have a Cost Estimate in Mind

We’ve given an estimate of the cost of outsourcing FinTech app development in one of the sections above. For more information, read these articles. “app design cost,” “cost of MVP development,” and “how much does it cost to build an app.” The cost estimate will guide what you offer during the actual negotiation phase.

Ensure that the agency’s pricing model is fair and will translate into a healthy ROI, although this can be difficult to achieve for someone new e that partners with a U.S.-based development team. As such, it’s best to broaden your horizon by outsourcing to a non-U.S.-based software team.

Once you’ve done the required research, you can now move to the next step.

This figure shows the main components of the first stage of the search for an outsourced development team

Step 2: Engage  Personally

As a founder, you must commit a great deal of time to hold briefs with your team. Doing this allows you to effectively communicate your ideas and also helps to guide your opinion of them.

While negotiating, use agile methodologies to judge how the personal synergies are firing or misfiring. Find answers to the following questions:

  • Do the development agency’s representatives appear professional and knowledgeable?
  • Do they seem easy to work with?
  • Do they show an attitude of concern and care over your startup?
  • Are they polite and respectful?
  • Do they agree to an NDA?
  • Do they have the right tech stacks in their ecosystem of tools?
  • Do they have a quality assurance expert of repute?
  • How do they plan to satisfy regulatory laws binding the financial industry?

Ideally, organizations are often at their best behavior while “courting” a new customer, so an area of hiccup now is usually a sign of impending problems. You should also be wary of agencies that are “too accommodating,” as it may be a false act to win your trust.

Engage your soft skills here and use initial meetings as a litmus test for determining if they’ll be effective in creating an apt synergy with your FinTech startup.

This figure shows the key points to focus on when moving on to the second step in choosing an outsourced development company

Step 3: Start with a Test Task

When it comes to deciding on which of your prospects is a perfect team for your FinTech project, it’s quite easy to mess things up since every software development agency will attempt to prove to be a good technical partner with an outstanding tech stack.

Sometimes spotting the right partner is outrightly unachievable, except you’re a knowledgeable tech expert. To solve this problem, you can filter prospective outsourcing agencies by giving them a test task.

It’s imperative that you only test their knowledge about the project’s intricacies. For example, if your project is highly dependent on IoT and big data, be sure to determine their capacity on these technologies.

Also, rather than sign a contract to develop a fully functionality-packed crypto lending platform, the test task of a mini-website for the platform gives you a hint of the teams’ attention to detail.  A bolder move will be a contract for the development of the MVP of a crypto trading application.

However, you don’t need a test task if the team has the following:

  • A verifiable portfolio with noteworthy projects
  • Genuine reviews on the clutch. Here’s an example of one
  • No compelling or justifying reason to doubt their expertise

Now that you have an apt understanding of outsourcing FinTech application development, let’s help you with a shortcut to one of the most reliable mobile app development companies.

Outsourcing companies only accept paid test tasks as they’ll have to commit a great deal of time and resources to even the smallest task.

This figure shows the key points to focus on when moving to the final stage of finding the right outsourcing development team

Have a Fintech Project in Mind?

Now that you’ve understood the nitty-gritty of FinTech development outsourcing, let’s give a much-deserved digital transformation to your startup by our intuitive app development team.

At Spdload, we’ll design, develop and deliver a FinTech MVP for your startup in a few months.

In doubt of our expertise? Then check through our portfolio and page on Clutch. You’ll be dazzled by our wonderful reviews.

Interested to develop your own FinTech application?

Contact us. We'll be happy to share our expertise in developing startups from scratch. You'll get a project estimate in the next 24 hours.

Talk to us

Bonus Infographic

Here you will find a summary of our detailed guide. Learn the basics of the FinTech application development outsourcing process.


This figure shows a step-by-step development process, detailing the costs and reasons for outsourcing FinTech application development



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