Having trouble keeping up with the pace of technological advancements in the finance sector? The right offshore development center can help.
In an increasing digitalized and global world, staying ahead of the competition can be tough. While the largest banks and FIs have the resources needed to keep pace with the advancements in digitalization and technology, small and medium-sized FIs often struggle. This is where Offshore Development Centers (ODCs) come to the rescue. Partnering with ODCs can help bridge the technology and skills gaps that hinder the growth of banks and other FIs. The caveat, however, is to choose the right vendor – one that can facilitate value realization. Let's take a deeper dive into the strategies to choose the right ODC for a rewarding partnership.
Why Partner with a Reputed ODC
An ODC is a dedicated development unit established in a foreign country, typically offering expertise and resources at a competitive price point.
The trend towards ODCs is driven by several factors.
Cost Optimization: ODCs tend to entail lower development costs than an in-house team due to factors like currency exchange rates, and potentially lower talent costs in certain regions.
Talent Pool Expansion: These vendors can tap into a broader pool of talent with specialized skill sets that might be scarce in your domestic market.
Scalability and Flexibility: ODCs offer the ability to scale development teams up or down quickly and on-demand.
24/7 Development Cycle: Since they are located across different time zones and often have remote teams, ODCs can extend development cycles, leading to faster project completion.
However, selecting the right ODC vendor is crucial for a successful software development experience. Several challenges need to be addressed for a fruitful partnership.
Challenge #1. Communication and Collaboration
One of the biggest hurdles of working with an ODC is ensuring effective communication and collaboration across geographical and cultural barriers. Time zone differences, language variations, and differing communication styles can lead to misunderstandings and delays.
40% of partnerships between banks and financial technology providers fail due to poor strategic alignment and execution planning.
Challenge #2. Quality Control
The FinTech space is heavily regulated and complex. Plus, when you want to establish a global footprint, the diverse regulations across jurisdictions add to the complexities. Then there is the need to maintain consistent code quality and ensure adherence to project specifications, which can be a challenge when working with a remote team
Overcoming the Challenge
Well-Defined QA Parameters
Set clear quality assurance (QA) parameters upfront, outlining testing procedures, documentation requirements, and defect management processes. Also, establish reliability parameters, such as Mean-Time-To-Repair (MTTR) and Mean-Time-Between-Failure (MTBF). Don't forget to also establish maintainability parameters, such as Mean-Time-To-Change (MTTC), to quantify progress.
Automated Testing
Implement automated testing tools, in combination with manual testing programs, to streamline the QA process and identify bugs early in the development cycle. In addition, ensure comprehensive assessment at regular intervals.
Regular Code Reviews
Establish a system for regular code reviews, conducted by both the onshore and offshore teams to maintain coding standards. Also, ensure reliability and standardization across the coding and development processes.
Ongoing Performance Monitoring
Monitor project progress closely and implement performance metrics to track quality and identify areas for improvement. But make sure that quality metrics and KPIs are defined in the initial stages.
Challenge #3. Intellectual Property (IP) Protection
Banks and FIs store and manage huge data volumes. This includes client data, as well as data related to internal processes, products and services. So, protecting such sensitive intellectual property (IP) is a major concern when working with an ODC. The complexity increases when different countries have varying IP laws and enforcement mechanisms.
