Moorwand reports the list of services outsourced by FinTechs

By Joy Dumasia

Moorwand, a payments solution provider, revealed that issuing tops the list of services that FinTechs outsource, with mobile wallets and customer communications coming second and third, respectively. Moorwand reports that with the rise of Open Banking, Banking as a Service and Embedded Finance, nearly half of FinTechs (49%) now spend 10-20% of their annual revenues on outsourced services, according to the Moorwand report ‘Specialists vs. generalists: How do fintechs fuel growth?’. 

The Moorwand report, based on a survey of 75 senior decision-makers at FinTech firms across the United Kingdom, France, Germany, Ireland and Lithuania, explores the state of outsourcing in FinTech and the use of either specialists or generalists on FinTech growth.

Based on the Moorwand report findings, there are three key reasons FinTechs outsource: 

• Scale – FinTech is moving from adolescence to maturity, and firms are looking to partners to help them scale their services. 45% of FinTechs are looking for third parties to plug gaps in existing capabilities.
• Expansion – Across the industry, we see the bundling of financial services. FinTechs have worked hard to acquire customers, and now they have their attention, they are looking to offer more benefits. 43% of firms outsource to accelerate their time to market. 
• Regulation – As the sector matures, it is becoming increasingly regulated. This has prompted the rise of Banking-as-a-Service (BaaS), as FinTechs effectively outsource compliance to a licensed third party. Seven out of the top 10 most outsourced services are regulated. And FinTechs prefer to work with specialists for all of them. 

Vicki Gladstone, CEO and COO at Moorwand, said: “FinTechs are growing fast and increasingly looking to outsource services and capabilities to fuel their expansion. The card and wider payment offering usually takes centre stage in most FinTechs’ proposition and is a key point of differentiation for the business. So, it’s no surprise to see issuing come out top nor that FinTechs are turning to firms with deep specialisms to help them to stand out from the crowd.” 

Moorwand is a London-based payments solutions provider offering issuing, digital banking, and acquiring services. It supports the payments and FinTech space innovators by providing access to card schemes and banking services.