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Optimizing Fintech Operations Through Outsourcing

In the highly competitive fintech environment, where innovation and customer focus are paramount, outsourcing certain activities becomes an essential strategy to optimize resources and accelerate time-to-market.

Banking Basics
This is the key concept to consider. These are the activities and features that any fintech, digital bank, or payment solution must have at a minimum. In other words, they do not differentiate the company from other businesses, and attempting to handle them in-house requires significant effort and broad specialized knowledge.

Market experience shows that trying to perform these activities internally can significantly delay a fintech's ability to establish itself with the minimum capacity to compete. The main operations that should be outsourced include:

  1. Transactional Processing: Payment Gateway, Transactional Ledger, Payment Settlement.

  2. Banking Operations: Billing, Invoicing, Collections, Financial Reconciliation, Accounting, Reporting.

  3. Risk Management and Regulatory Compliance: KYC, Anti-fraud, AML/FT, Regulatory Reporting, Prudential Compliance, and LGPD Compliance.

  4. Customer Support and Service: Level 1 Support, Multichannel Support, Complaint Management, Ombudsman. Always with close management, ensuring the appropriate tone of voice, service scripts, training of the outsourced team, and creating efficient channels with the internal team that resolves issues.

  5. IT Infrastructure and Security: Servers, Infrastructure Monitoring and Maintenance, Information and Cybersecurity, Disaster Recovery.

  6. Applications and Digital Solutions: Digital Onboarding, Payment Initiation, Payment Methods, Process Automation, User Interfaces (UI/UX), and other functionalities focused on meeting "Banking Basics," allowing efforts to focus on what truly differentiates the business.

How to Prioritize?
To define priorities, evaluate the following criteria:

  • Resource Consumption
  • Exposure to Financial or Reputational Risks
  • Opportunity Cost

Opportunity cost is one of the most important factors but often neglected because it is difficult to quantify. It is essential to assess how much each dollar (or time) invested in developing a "Banking Basic" feature in-house may be reducing the potential gain of a differentiating feature if it were launched more quickly.

It is important to remember that equity capital is the resource that demands the highest rate of return (references to corporate finance books can be provided for those interested).

Why Outsource?
Outsourcing allows the company to focus on its differentiating activities while improving operational efficiency, reducing costs, and ensuring compliance. It is the smart strategy for scaling the business sustainably.