The Client-Vendor Playbook: Product, Outsource, and Outstaff Explained

In Episode 110 of Fintech Garden, Igor Tomych sits down with Artem Boboshko, VP of Business Development at DashDevs, to dissect the client-vendor relationship in fintech. They break down outsourcing models, vendor accountability, and the benefits and risks of external partnerships. This episode is a must-listen for fintech startups, product managers, and CTOs navigating the complexities of software development, product management, and financial technology innovation.

Defining the Different Engagement Models #

The discussion starts with the different types of vendor engagement models, crucial for fintechs building and scaling digital products. Artem highlights six key models:

1. Software Outsourcing – Clients bring ingredients (business requirements, tech stack) and need expert execution.
2. Product Outsourcing – Clients define an end goal but require vendor expertise to shape the product.
3. Outstaffing (Staff Augmentation) – Extending in-house teams with external specialists.
4. Consulting Services – Engaging vendors for strategic guidance.
5. Recruitment Services – Hiring specialists through external vendors.
6. Licensing Models – Using pre-built financial technology solutions.

Product vs. Software Outsourcing: Understanding the Difference #

A simple analogy of an apple pie illustrates the distinction:

• Product outsourcing is when a client says, “I need an apple pie,” expecting a vendor to create the entire product from scratch.
• Software outsourcing is when the client has the ingredients but needs a vendor’s expertise to execute the recipe.

Many fintechs lack the internal expertise to estimate resources, timelines, and execution strategies, making outsourcing a strategic choice.

Vendor Accountability in Fintech #

Accountability is a major factor in fintech vendor engagements. Who takes responsibility for success or failure?

• Early-stage fintech founders often seek vendors who bring expertise in regulatory compliance, software development, and market trends.
• Vendors bridge knowledge gaps, providing insights on industry best practices and regulatory requirements.
• Internal vs. external product development – When should fintechs build in-house vs. rely on external vendors?

Should You Build In-House or Outsource? #

The decision to build internally or partner with a vendor depends on:

• Project complexity vs. complications – Simple problems (like implementing KYC) vs. complex, market-defining innovations.
• Time to market – Vendors accelerate fintech product launches.
• Scalability – Vendors provide agility in team size and resources.
• Internal expertise – Startups often lack specialized skills in fintech software development.

Common Pitfalls in Vendor Relationships #

• Mismatched expectations – Hiring a developer but expecting strategic product guidance.
• Failure to define success metrics – Without clear KPIs, outsourcing engagements can fail.
• Rigid vendor management – Successful fintechs treat vendors as strategic partners, not just service providers.
• Ignoring vendor expertise – Fintech founders should leverage market knowledge and prior vendor experience.

Successful Vendor Collaborations in Fintech #

The episode features real-world fintech success stories, including:

• A UK-based financial services company collaborating with multiple vendors to deliver a specialized product for a niche market.
• A fintech startup working with core banking providers to integrate services from ClearBank, Stripe, and Third Fin.
• How fintech vendors provide faster execution, cost savings, and industry expertise, reducing hiring risks.

Book Recommendations from the Hosts #

To complement the discussion, Igor and Artem recommend two must-read books:

• Understanding Payments – A fintech guide covering payment systems, regulations, and digital finance trends.
• Positive Intelligence by Shirzad Chamine – A book on identifying mental barriers (saboteurs) and improving decision-making.

Final Thoughts #