Let’s say you want to build a brand new car. To build one, you will need experts in the form of engineers for the engine, designers for the interior, and software experts for the computers on the dashboard.

Now consider in the same way, a fintech company that uses fancy technology to dispense financial services like a mobile banking app or a payment system. They are going to need technical experts to build their product too. But now the question is do you want full-time or permanent employees? Or perhaps you can leverage outside expertise, or freelancers, for just the time you need?

Do you want an IT Staff augmentation company, or a flexible team of hired experts you can bring on board quickly? This article will break down both options in simple terms, looking at the pros, cons, and—most importantly—which one usually works best for fintech companies trying to build something amazing.

Defining the Two Hiring Models

1. In-House Recruitment

An in-house team is the one that includes full-time employees formally employed by a company. They are fully integrated into your culture, processes, and long-term vision. They work particularly on your projects and are managed by the internal leadership.

2. Staff Augmentation

Staff augmentation provides you with a flexible outsourcing model that can enable you to “augment” your own team by hiring – or sourcing – people outside of your organization for a specific project. Again, these can be developers, QA engineers, or cybersecurity professionals. Although they work for you, you are only providing management and direction; and the augmentation vendor is providing the placement.

When In-House Recruitment is the Superior Choice

An in-house team is often the core of a fintech company. It is the model of choice for:

• Core Product Development: The algorithms, banking cores, or risk management systems that represent your competitive advantage should be built in-house. This ensures your IP is secure and can support an intensive level of institutional knowledge.
• Handling Sensitive Data: Projects that will be using very sensitive customer data or proprietary trading strategies can potentially gain from maximum security and control that a dedicated internal team can provide.
• Development of Company Culture: You need a strong company culture for sustainable growth. Full-time employees are more willing to work together to fulfill the organization’s mission.
• Long-Term Maintenance & Iteration: Fintech products require continuous maintenance, fixes, iterations, feedback, and regulatory changes – a constantly evolving task that can be carried out effectively by a stable in-house team.

When Staff Augmentation is the Strategic Weapon

The Fintech industry moves very fast. Staff augmentation allows the agility to succeed without the long-term commitment. It is ideal for:

• Scaling Teams Rapidly: To meet a product launch deadline, handle a sudden surge in workload, or develop a new MVP, augmentation allows you to scale your team up (and down) with incredible speed.
• Controlling Burn Rate: For startups and SMBs, managing cash flow is survival. Augmentation avoids the massive fixed costs of full-time hires, preserving capital.
• Accessing Global Talent: The Fintech world is not restricted by geography. You can find the best experts to do the job, anywhere in the world, even at a cheaper cost structure than full-time experts.
• Specialized Projects: Applying a new regulatory reporting tool, performing a thorough security audit, or migrating to the cloud are perfect finite projects for an augmented team.

Use the Hybrid Model to Get the Best of Both Worlds

Many successful fintech companies out there are adopting a hybrid approach to get the best of both worlds. They continue to retain a strong in-house core team that handles the strategic and ongoing aspects of the fintech product. This team defines the architecture, manages the core codebase, and upholds the culture.

They then use staff augmentation to:

• Inject specialized skills for new initiatives.
• Speed up development cycles for new features.
• Handle defined, compartmentalized projects.

This model provides a balance with the stability and control of an in-house team with the flexibility and scalability of staff augmentation.

Conclusion

It’s not a question of in-house team or staff augmentation for a fintech app development company, but rather what will work best for your business objectives.

• Your in-house teams will represent your longer term investment in stability, culture and core intellectual property.
• Your staff augmentation will represent your accelerated growth, agility and expertise..

The smartest fintech leaders will learn how to leverage both approaches, developing a stable resilience in-house and then engaging the cloud talent of the world through augmentation to execute with speed and precision. Flexibility for companies is no longer a competitive advantage, but a necessity.