The financial and banking sector is among the key pillars of any economy. Thus, periodic needs to expand the existing team arise from now and then. While the two can hire full-time employees, sometimes hiring is lengthy, and after hiring, it may require them to train the team. Overall, in-house hiring for a task that will last for three months is costly and wastes time. That is where banking and financial sector staff augmentation comes in. It is a strategy through which the two sectors can augment their existing teams with new and experienced financial staff whenever needed.
Staff Augmentation for Banking & Financial Services
What is Staff Augmentation?
Staff augmentation is a model of outsourcing various resources where the right t skills are engaged to fill a gap in an organization within the stipulated time. Staff augmentation combines the in-house workforce with the outsourced human resources expanding the in-house team to handle the task. Staffing specialized personnel, especially for banks and financial institutions, to standby in an organization can prove difficult as the money needed to find the right engineers can be high. Therefore, outsourcing these skills through staff augmentation offers an easy way out.
Benefits of Staff Augmentation in Banking and Financial Sector
Banking and finance are sensitive sectors considering that it handles money. But like most sectors, it has joined in the upcoming trends in the market like staff augmentation. Hiring an in-house employee with advanced communication and technical ability can be a costly option; neither is it the only option anymore. Globalization has made it possible to build remote teams when needed, key among them being the financial and banking sectors. Even though staff augmentation requires an existent in-house team, achieving it does not cause physical presence.
Below are some benefits of staff augmentation for financial institutions and banks:
The significant benefit of using staff augmentation in banks and financial institutions is the ability to save costs. This model does this in multiple ways; first, it saves on the advertising cost of vacancies in different media. When a position opens and requires to be filled, advertisements are the most logical way to get the word out. These adverts are done on different media platforms from newspapers, advertising websites, television stations to radio stations. Advertising costs ran high and sometimes longer than expected. Staff augmentation gets rid of advisement costs as one only needs to contact the augmenting company.
Second, the normal in-house hiring process has pre-employment costs incurred through background checks and pre-employment assessment tests. They are due diligence processes the banks and financial institutions carry out to ensure that the employee is trustworthy and reliable. In staff augmentation, the augmenting company handles this cost when the employment happens. Therefore, when the employee comes on board in a bank, they are satisfied.
Third, staff augmentation eliminates the cost associated with onboarding during in-house hiring. The only cost incurred in the staff augmentation model is the agreed-upon cost on the contract, which is based on the task to be performed.
Increased Output and Team Size
Since staff augmentation adds on to the existing workforce, the team’s output, both the in-house and onboarded combined, is increased for a short time. Staff augmentation increases bank and financial institution’s output and helps in meeting set deadlines and complete projects.
Lower Operational Cost.
The banking and financial sector may also use IT staff augmentation. This form of staffing is done remotely; this arrangement avails it the advantage of low developmental cost. We can view this advantage in two ways. Depending on the team’s country, their salaries might be less than the in-house salaries, for starters. This eliminates a huge chunk of the overall cost. Second, since the augmented talent is not an employee of the company, social security, employee benefits, taxes, and insurance cost are not catered for reducing the developmental cost. In addition, equipment and office space costs get eliminated, getting rid of operational costs. Therefore, using staff augmentation is an excellent way to cut down the developmental costs of banks and financial institutions.
Less Recruitment Headache
When a bank or a financial institution turns to staff augmentation companies for help in recruiting, all the processes involved with recruitment are transferred and become their responsibility. They search for a qualified candidate under the requirements given by the bank. The only responsibility or, better yet, task that the bank keeps is interviewing the proposed candidates for the position.
Scalability and Flexibility
Staff augmentation provides resources on demand. The staff augmentation company caters to the needs of their client when the need encroaches. This leaves the bank or financial institution with the option to add or reduce the task force in their projects. The bank can add or reduce the staff on the project.
The bank has a remote and on-site team, giving banks and financial institutions geographical and time flexibility. For instance, in case of a technical issue, the project leader may opt to assign a remote developer while assigning the in-house team an unfamiliar task altogether. Such scalability and flexibility can only be achieved through staff augmentation.
Keep Project Control
Staff augmentation adds to banks or financial institutions’ in-house teams, which helps keep the project’s autonomy. The onboarded staff only works on the tasks assigned tasks at the specified times. Therefore, the projects will run according to the bank’s preferences giving them complete control of the entire project. In case of new requirements for the project, the decision lies squarely on the project’s manager from the bank. The outsourcing company is only purposed with finding qualified personnel for the job.
Access to A Larger and Specialized Market
The next benefit of using staff augmentation for banks and financial institutions is that it gives access to a global market of specialized professions. Whether the skills needed may not be available locally, staff augmentation offers a larger talent pool for the picking. Sometimes, the specialist need may be available locally but at an exorbitant price. Banking and financial sector staff augmentation give the option to find the exact talent at a lower price from another country.
Challenges of Staff Augmentation for Banks and Financial Institutions
Enlisting expert skills like software developers in a bank in-house team does not go without its challenges, especially for banks and financial institutions. Banks and financial institutions handle sensitive data because their first line of defense is their security systems. Below are some challenges associated with a staff augmentation in banks and financial institutions:
Recruiting people to join a team is never easy, even with the staff augmenting the company involved. Finding a specialist to join the in-house team without the background checks and tests may sound easy, but in fact, getting an expert to augment the house team may be as complex as usual as the standard recruiting process. There will be several interviews before the bank or financial institution finds it match and agree on terms. However, this challenge can be solved by enlisting to a service of a seasoned staff augmentation company.
Issues with jurisdiction
For any in-house team who has been working together, there is a culture that is developed. The culture could include work ethics, patterns ad timetables, and teams. Onboarding a new member to this equation is destabilizing, and the newcomer might take a long to fit in. The newcomer needs effort and time to catch up and get assimilated into the system. The time needed is also the same factor that staff augmentation is based on, and the institution has no time to give for assimilation.
We can solve this challenge by appointing a point person for the incoming team to help them become acquainted with the in-house team. Second, during the interviews, the incomers can get incentives to get them excited about the new position. Having a support system for the new term after incorporation would also go a long way to help.
The basis of banks and financial intuitions settling on the use of staff augmented services is time and completion of a specific task. Sometimes, the augmented team works on a project, and the time assigned is not enough to complete the project. Or similarly, the outsourced team gets to finish the product in the time given, and it is finally time to out roll it. To the customer’s surprise, the project has a fault or does not do the intended purpose.
The unfulfilled expectation challenge can be avoided by making sure that both parties from the start understand what the final product is intended to do and how it should look like.
Typically, outsourced resources hiring is hourly. The project may run longer than initially expected, leading to improvising. Staff augmentation is a short-term optimum outsourcing model, and long periods render it expensive. The challenge presented could have been prevented altogether by hiring an in-house resource.
This challenge can be avoided by opting for fixed-price contracts.
A Third-party’s incorporation into a bank or a financial institution entails considerable risk. Total privacy and security considerations of data are not guaranteed. Therefore, leaving the institutions open to data leaks, hacking attempts, and fraud attacks. Banks and financial institutions having pensive information and data makes them especially vulnerable to this challenge.
This challenge can be addressed by putting the augmented employees under NDA regulation from the project’s onset.
Uncertainty of Legal Issues
Staff augmentation services being an internationally linked practice, it is impossible to be entirely sure of the legal implications. The legal foundations defer from one country to another, which can only be known while in negotiations for the contract, which might be too late to pull out.
Time zone Discrepancies
If the outsourced team member is from a different country or continent, the possibility of different time zones is high. Hence, synchronizing work between the in-house team and the onboarded specialist becomes a real problem, especially since banks and financial institutions have strict working hours.
On the brighter side, some outsourcing companies take this upon themselves and synchronize their schedule to fit the employee’s time zone and working hours. To solve the challenge, one should inquire about the outsourcing company’s policies before enlisting an employee.
Why Choose Staff Augmentation for Banks and Financial Institutions
Banks and financial institutions mostly put most of their efforts into their customer service and financial aspects. This leaves various departments bare and not well skilled in various needs. Below are some of the reasons banking and financial sectors should choose staff augmentation as their mode of outsourcing:
- The first and obvious one if a project requires specialized expertise
- Staff augmentation satisfies the temporal need for extra staff
- It satisfies temporary workload demand
- After a project is done, staff augmentation can be used for testing the product before release, and
- If the hiring process takes too long, the institution needs to temporarily fill a position with skilled personnel as they continue the hunt.
Applications of Staff Augmentation in Banking and Financial Institutions
With the resources and several in-house skilled developers in banks and financial institutions, we apply staff augmentation services in areas such as:
- Infosys Finacle is a software developed by EdgeVerve Systems Limited used in the finance and banking sector. It assists with core banking, mobile banking, treasury, liquidity, and wealth management.
- The hiring of investor analysts
- Microsoft Technologies, including Spring, Hibernate, and Struts.
- The operating system the likes of Linux, UNIX, Windows, and Solaris
- Financial Associates, analysts and CFOs
- Core banking applications, for instance, 7x, 10x, and TCS Bancs24.
- Testing in automation, manual, Network, and Telecom.
With the changing work requirements, it is hard to hire an in-house employee for every arising need. Thus, staff augmentation is the only path left to fill various skills gaps in the banking and financial sectors. Though there are challenges, the benefits outweigh them. Financial and banking sectors being among the critical holders of any economy, they require good skills whenever they need them for seamless execution of their fundamental functions. Staff augmentation is about ensuring that the business departments can get on with their routine tasks without compromising the quality of work and strategic goals.