Key areas to consider when resourcing your FinTech

This week we've got a guest writer for Technology Resourcing by Matt. Ironic really given the title. This week we'll call it FinTech Resourcing by Stu. You can find the full piece here.

Who is Stu?

Stuart Houghton is the CEO of BrightBox Group Ltd and Co-Founder of Planixs , which is one of the fastest growing, award-winning FinTechs in the North West. Planixs built treasury software for real-time control and regulatory compliance over cash, collateral and liquidity management. Their customer base consists of world leading financial and banking brands like Barclays, Santander, Lloyds Bank and many more. Prior to BrightBox and Planixs, Stuart spent 16 years in management consulting working with multiple industries across both private and public sectors focusing on leading large business process and IT consulting solutions.

With 30 years' of expertise in transformational projects, resourcing challenges and building businesses here are Stu's key areas to consider when resourcing your FinTech.

Protecting your IP

If one, or your sole method, for finding the right tech talent for your startup is via a resourcing partner, it is absolutely vital that you protect your intellectual property (IP) at all costs, after all this is your secret sauce! Review your contracts to ensure you have a clear understanding of who owns the IP and under what conditions.

Many resourcing firms won’t engage with startups because of the financial risk and volatility associated and will sometimes use IP as leverage. With BrightBox, IP is always owned by the client. Due to the high level of risk involved in the startup industry, it is common practice to transfer ownership of IP only after the client has paid each of their monthly invoices. This approach helps mitigate the risk for the service provider when working with a client that has little or no prior trading experience.

Heed this advice: be critical of your intellectual property (IP) ownership and safeguard it at all costs, but consider the issue from both sides.

Scaling too quickly or too slowly

Scaling your tech teams too quickly or too slowly both carry risks that can negatively impact the success of your company. Scaling too slowly results in missed opportunities, an inability to meet your customer’s demands, and stagnation. On the other hand, scaling too quickly risks that the infrastructure of your business cannot support the speed of growth. In addition, scaling quickly means your cost base will dramatically increase. It is important to work with a resourcing partner that is responsive to changing conditions and that will support your business with scaling up and scaling down your capacity quickly.

Hiring the wrong people

According to a 2021 survey by the CB Insights,?14% of startups that failed?cited team problems as a contributing factor. Hiring the wrong tech talent can have a significant impact on a tech startup. Poor hiring decisions can result in a lack of technical skill, misaligned team dynamics, and other challenges that can negatively impact a startup's ability to succeed. By failing to carefully assess the fit and capabilities of potential tech hires, you’ll risk hitting a number of challenges that could be otherwise avoided, highlighting the importance of finding the right tech talent for their team.

Overpaying for tech talent

It's so easy to pay over the odds for tech talent. Especially if this is your first foray into hiring (without the comfort of a large HR team wrapped around you) and you’re a startup with limited resources and you need to build your team quickly. Overpaying can limit your ability to invest in other areas of your business that may be important for growth and success. In addition, overpaying for tech talent will attract individuals who are more interested in compensation than the mission and vision of the company.

When resourcing, make sure that you know what the market-relevant rate is for the skills you need and use this as a reference point. You can find the going market rates on job boards online, in industry reports (e.g.?itjobswatch), professional organisations, by asking around in your network, or through your resourcing partner who should want to get you the optimal answer. If you do consciously look to pay more, because you need to move quickly on top talent, make sure that you get the value you are paying for, and always get references.

Startups operate at a faster speed, and as a founder or tech leader you’ll likely be wearing many hats that require your attention all the time, but skipping this vital step can cost you dearly and require that you repeat the hiring process all over again.

Competition for resources

The UK has a highly skilled and educated workforce, with a host of world-class universities producing a steady stream of tech-savvy graduates. However, competition for the best and brightest is fierce, with many tech companies competing for the same pool of talent. With a limited pool of resources and a high demand for skilled workers from more established tech companies, fighting for that talent can be a major challenge. Working on your company overview, the benefits that others wouldn’t normally offer (such as share options) can really help position your startup well…add to that the fact that it is an exciting opportunity that offers amazing job growth at pace, and you start to have a winning formula. Working with a tech resourcing and capability partner like BrightBox, who can help with this pitch, will unlock a sea of skilled and experienced tech talent in the UK and beyond that has been pre-vetted for you.

Being afraid to engage remote working/nearshoring

Effective communication is critical for a startup. While having everyone in the same room can be ideal for effective communication and collaboration, it's not always the best answer. In addition, embracing tech resource from other countries and cultures can bring such a wide range of views to the table that can be worth their weight in gold. Remote work offers a more flexible and cost-effective alternative, but make sure you have the right tools and systems in place to support effective communication and collaboration.

Don't just hire in your vicinity,?break the location barrier and resource for skills?and experience instead. This will give you access to a greater pool of skilled tech talent to choose from, and likely optimise your resourcing costs.

Offshore Vs. Nearshore for Startups

It is widely believed that using offshore talent as a resourcing strategy is an effective way of delivering tech resource for the most competitive price. This might be true for larger enterprises that have highly advanced processes, documentation and large established teams, but not necessarily for startups.

Offshore is ideal for larger enterprises as offshore talent work around the clock and in a very methodical way against documented briefs. If you have not written it down, it will not be done, or it will be lost in translation, so it’s difficult to build a trusting and proactive working culture for a company at such an early stage.

Using offshore resource for your startup means your team will be working in different time zones than your core team, which can make collaboration much harder. Naturally, this may not be what you want, especially when there’s so much personal attachment to the project because you’re all in it together in the early stages.

Nearshore resource are ideal for startups and will provide you with the technical skills that your startup needs in a timezone that is likely to be no more than +/- 2 hours. You will also benefit from a cultural crossover, and your nearshore team will be solving problems together with you and you will be making significant cost savings in the longer term.

Lack of in-house expertise

Startups may not have the in-house expertise needed to build and maintain the complex systems required for a successful fintech operation. A hybrid resourcing model can be an effective solution. To minimize expenses, and ensure quality infrastructure, output, and business continuity, you can retain senior tech leaders and IP creators in-house while supplementing with nearshore talent. Nearshore tech talent offers several benefits for startups, including optimising costs, cultural alignment, time-zone alignment and access to a wider pool of talent to choose from. In addition, by its nature, flex resource can afford your startup the ability to scale up or down as required.

Failing to retain talent

Retaining top tech talent is critical for the success of any fintech startup. It's important to create a culture that supports and motivates your team and provides opportunities for growth and advancement. In the early days, it is hard to find the right balance between salary increases and driving the cost base of the business up, especially when it is in that ‘ideation’ stage. So considering alternatives, such as stock options, celebrating the milestones with a cost-effective event, or even just getting the team together on a regular basis can act as a great way of retaining that talent.

Integration with legacy systems

Many fintech startups need to integrate their technology solutions with their client’s legacy systems. This can be a complex and time-consuming process, requiring specialised technical knowledge and resource. Startups may need to allocate additional tech resources, such as software engineers, API specialists, and quality assurance specialists, to manage the integration process which can significantly impact on resourcing budget.

A way to mitigate this is to build the base platform or product and use it to foster interest from prospective clients. Clients will often be open to co-investment to build out your integration points. The client will benefit from reduced rates and licence fees, and you will be able to invest in the resource you need to build the integration points. Win/Win. Note of caution though, make sure that you always retain the IP around APIs.

Security and regulatory compliance

Fintech startups must adhere to strict security and regulatory requirements which can be challenging given the rapidly changing nature of technology and the regulatory landscape. This requires specialised expertise and resources that can be difficult to secure. When you work with a tech resourcing partner with fintech expertise, you are able to access a wider pool of specialised talent that can meet those requirements, enabling you to focus on what you do best, while your resourcing partner finds you those specialist resources to help take care of those niche requirements.

Staying current with technological advancements

Fintech startups must stay current with the latest technology advancements in order to remain competitive. This requires a significant investment in training and development for existing technical staff which you might not have as an early-stage startup. Working with a resourcing partner, you will have access to a pool of onshore and nearshore talent with the relevant skills and experience you need to get you up and running whilst you establish what you want to do longer term.

Be open to creative commercial models

Any startup always has a level of risk attached to it, the main one being that it simply runs out of cash and is unable to pay its way. This will be at the top of the list for any resourcing partner, and this is why Brightbox has created a number of commercial models that help manage that risk, enabling the startup to gain access to the talent it needs to give it the best chance of success.

You can read more about FinTech resourcing in the full piece. If you're a FinTech leader, you'll understand the unique advantage of having a strategic partner to help you navigate the challenges of tech resourcing. Resourcing is a critical challenge for FinTech businesses, even more so in the early stages.

With the right approach and the right resourcing partner, it's possible to find and retain top talent without breaking the bank. If you're looking for a flexible, cost-effective, and experienced solution for your tech resourcing needs then BrightBox Group Ltd is a good place to start.