First, a basic definition: White label banking is a technology that allows non-banking companies, such as fintech platforms, SaaS providers, and marketplaces, to integrate banking services like accounts, digital wallets, cards, and payment processing under their own branding.
One of the great things about white label banking is that its solutions are pre-built by third-party providers. This means that businesses can launch financial services very quickly because they’re not required to build their own banking infrastructure from the ground up.
Today, white label banking is pretty much essential for modern businesses, as it not only enhances customer experiences and brand loyalty, but also enables new revenue streams. Thanks to it, businesses can easily meet the growing demand for convenience and personalized financial solutions among consumers, and differentiate themselves in a competitive market while reducing operational complexity and costs.
Sounds too good to be true? Let’s see if we can convince you that it’s really not.
What is a white label bank
Unlike traditional banks, a white label bank operates behind the scenes, providing the necessary banking infrastructure, while customer-facing companies that have partnered with it embed the relevant financial services directly into their existing platforms and brand those services as their own.
Our model exemplifies this model by offering API-driven solutions, including multi-currency IBANs, white-label debit cards, digital wallets, and global payment capabilities. In addition, we take care of such back-end functions as compliance by offering embedded compliance with KYC and AML regulations, as well as of transaction security, on behalf of our clients. This leaves more time and resources for them to create a truly seamless customer experience.
Why businesses are increasingly turning to white label banks
Businesses across industries like fintech, eCommerce, and SaaS are increasingly adopting white label banks to deliver innovative financial services at much lower development cost. For instance, according to Research and Markets, the global white label banking market is forecasted to grow at a CAGR of 10.6% from 2021 to 2028, while Grand View Research estimates the market size, valued at $1.6 billion in 2020, will reach $5.1 billion by 2028.
These are impressive numbers – and they’re not exactly difficult to understand. By offering API-driven solutions (e.g., digital wallets, multi currency payments and accounts) and outsourcing the back-end, white label banks like ConnectPay are making it much easier for ambitious companies to scale globally.
The core drivers behind the shift to white label banks
The rapidly progressing shift to white label banks is mostly driven by cost-effectiveness, speed to market, branding control, and simplified regulatory compliance:
- Building traditional banking infrastructures requires large investments, execution of intricate compliance procedures, and ongoing maintenance. Conversely, white label banking allows businesses to launch services at a fraction of the cost.
- API-based platforms help businesses rapidly deploy features like multi-currency IBANs, payment gateways, and VISA cards, bypassing the need to build from scratch and boosting speed to market.
- Brands choosing to partner with reputable white label banks retain full control over customization, which allows them to deliver fully branded, seamless financial services to their customers.
As we’ve already indicated, white label banking providers also simplify regulatory compliance, which includes AML, KYC, and due diligence. Handling these in-house is not only difficult, but also expensive, with companies sometimes being forced to establish separate departments just to stay on top of all the related legal complexities.
The core elements of white label banking
White label banking revolves around three core elements: APIs, web and mobile apps, and banking software – all features and technologies that our banking as a service platform has been delivering to customers with great success for years.
Here’s a brief overview of the core elements in turn:
- APIs are the backbone of white label banking, as they enable smooth integration between systems, platforms, and services.
- Web and mobile apps provide user-friendly, customizable interfaces for customers, and allow businesses to enhance their brand presence while meeting client expectations for convenience and accessibility.
- Core banking software powers the back-end infrastructure, handling essential operations like customer onboarding, account management, and payment processing.
Now that we’ve covered all the basics of white label banking, let’s take a look at its benefits – and how to get started with it.
The benefits of white label banking
In this section, we’ll zoom in on some of the main benefits of white label banking for businesses. These include improved customer experience and retention, simplified global scaling and regulatory compliance, diversified services, new revenue streams, and more. While the discussion below isn’t exhaustive, it will hopefully give you a good grasp of what makes this solution so powerful and why companies around the world are increasingly turning to it to stay competitive.
Improved customer experience
There are multiple reasons for white label banking’s track record of making interactions with a brand more pleasant to customers. For one, they appreciate the fast and convenient local and cross border payments made possible by multi-currency accounts and multiple payment methods to choose from.
Moreover, white-label mobile apps give brands plenty of room for customization, which helps them to better meet their customers’s preferences, and include handy features like instant notifications for transactions and detailed financial analytics, which make interactions intuitive and engaging.
Finally, efficient APIs provide numerous additional benefits to users that businesses can integrate into their platforms with ease. For instance, users can activate cards instantly, monitor balances in real time, and enjoy advanced security measures like tokenization.
Improved customer retention
By offering branded financial services, businesses establish themselves as innovators in their customers’ eyes and send a clear message of attentiveness to their needs and preferences. In addition, using branded services and cards forges a stronger bond with the business during every transaction.
Customers are more inclined to stay loyal to brands that offer a tailored financial ecosystem because it fosters a sense of personalization, convenience, trust, and exclusivity. For instance, when customers can manage their finances effortlessly through branded mobile apps, track real-time spending, or access multi-currency accounts without hidden fees, they perceive the brand as customer-centric and reliable. By embedding these services into the customer’s routine, businesses create a dependency on their platform, encouraging long-term loyalty and reducing the likelihood of customers seeking alternatives.
Increased revenue streams
Solutions like debit cards, digital wallets, and payment solutions allow businesses to generate income through transaction fees, account fees, and interest on stored funds.
More specifically, branded debit cards generate revenue every time a customer makes a transaction, as businesses earn a percentage of the interchange fee. Digital wallets and multi-currency accounts can also incorporate subscription or usage fees, while payment gateways are great for driving income through processing charges.
Additionally, stored funds in customer accounts or wallets can generate interest income, further diversifying the revenue streams of non-financial companies.
Competitive edge in saturated markets
Unlike their competitors who rely on generic third-party solutions, businesses leveraging white label banking can differentiate themselves with branded financial services and pull ahead in today’s saturated markets.
This competitive edge attracts new customers who are drawn to a cohesive and exclusive financial ecosystem tailored to their needs. For example, a subscription-based service could provide branded payment gateways for faster checkouts, making the process smoother and more appealing than competitors using standard payment systems. Meanwhile, existing customers are more likely to remain loyal to a brand that meets their financial needs within the same ecosystem.
Simplified scalability worldwide
When it comes to scaling traditional barriers to international expansion, white label banking is an absolute gem. Instead of navigating complex regulatory landscapes or developing region-specific financial tools, businesses can rely on pre-built infrastructures already tailored for global markets. For instance, by offering solutions like real-time currency conversion and global payment processing, we help businesses serve diverse customer bases with complete peace of mind.
This powerful solution also ensures compliance with local regulations and standards in multiple jurisdictions, which means that businesses can direct all their attention to strategic growth without being slowed down by legal hassles. Scalability is further enhanced through modular APIs, which allow companies to add or adjust features based on market demands, such as integrating new payment options or region-specific currencies.
Diversified services
The possibilities under this heading are only limited by one’s imagination, as the number of different services that can be embedded is theoretically infinite. For instance, by partnering with a white label bank, an eCommerce platform can expand well beyond product sales to offer branded payment solutions or embedded financial services, creating a holistic ecosystem for its users. Similarly, to enhance its value proposition, a SaaS business can decide to, say, introduce subscription-based accounts or financial management tools. We could go on.
But the point here is that white label banking makes it super easy for non-financial companies to expand the range of services they offer by integrating them into their platforms.
Access to new marketing tools
White label banking is also great for gaining a deeper understanding of one’s audience, which can then be used to craft more targeted and effective marketing strategies. Rather than go in blindly and hope for the best, a business can base its campaigns on a mass of data, which gives insight into spending patterns, customer preferences and demographics, and other key information.
Not only that, white label banking, as we’ve already discussed, enhances brand visibility by allowing companies to offer financial services under their own name. And the closer a business gets to a one-stop solution for diverse needs, the more customers will gravitate towards it, further amplifying its market presence and competitive edge.
Flexibility and adaptability
Given the modularity of the services provided by white label banks, companies can easily mix and match them according to evolving customer needs and market conditions. Features like new payment methods, loyalty programs, and Buy Now, Pay Later (BNPL) schemes can be integrated into their platforms within record time and without disrupting their daily operations.
This flexibility ensures that businesses have the capacity to respond quickly to shifts in consumer behavior or emerging industry trends, maintaining a competitive edge. By customizing offerings to specific customer segments, they can enhance satisfaction and foster loyalty. And, last but not least, the ability to scale and adapt services on demand helps businesses seize opportunities and navigate challenges in today’s dynamic market landscape.
What businesses benefit from white label banking
Although businesses can benefit from the solutions we’ve discussed so far, regardless of industry, different tools are more relevant to some and not as much to others:
- Fintech companies benefit by rapidly scaling their financial offerings, leveraging the secure, compliant infrastructure offered by ConnectPay and similar providers.
- SaaS platforms can integrate a range of new services to enhance their value proposition, standing out by embedding tailored financial tools for users.
- eCommerce platforms gain from embedded finance services like instant payments, bulk payments, and financing options, creating seamless customer experiences.
- Marketplaces streamline financial transactions between buyers and sellers, ensuring efficiency and trust through integrated banking solutions.
- Crowdfunding platforms simplify complex payment flows, ensuring smooth fund transfers between investors and project owners.
- Sports clubs can enhance fan engagement with branded financial services and better manage memberships and revenue streams.
- Wealth management firms benefit from simplified management of multiple accounts and transactions through tailored banking tools.
- Lending platforms improve loan distribution and repayment processes with white label banking.
- Alternative financing providers streamline operations with enhanced payment flows and financial flexibility.
How to get started with white label banking
While it may seem intimidating to start partnering with a white label bank if it’s your first time, it’s actually quite simple and straightforward – we’ll break it all down for you step-by-step in the following sections.
Understand your business needs
Before jumping right in, make sure you’re clear on your actual business needs. Be specific. Assess your target market to determine which financial services will resonate most with your customers and align with your business goals. You don’t want to be investing in solutions that add no value and don’t support growth.
To get you started, here’s a brief list of things to consider:
- Analyze customer demands: conduct surveys or interviews to identify customer pain points and preferences for financial services.
- Evaluate market trends: research industry trends to anticipate future needs and stay competitive.
- Define objectives: clarify your goals, whether it’s enhancing customer experience, generating new revenue streams, or improving operational efficiency.
- Assess provider offerings: compare features like compliance, scalability, and customization options of potential providers.
- Pilot testing: start with a smaller implementation to test the effectiveness of the solution and gather feedback.
Careful assessment and preparation will help you choose a solution that aligns with your market and long-term business strategy.
Pick ConnectPay as your white label banking provider
If you’re looking for a top-level white label banking provider, you can’t go wrong with ConnectPay. We prioritize compliance (all our solutions come with built-in compliance) and security to ensure adherence to the most stringent regulatory standards and to safeguard customer data. Our customization options allow businesses to tailor financial products to meet specific customer needs, strengthening brand identity and enhancing customer loyalty.
Furthermore, our services offer unparalleled flexibility, helping businesses scale their operations and adapt to evolving market demands. Whether you’re a fintech, eCommerce platform, or marketplace, ConnectPay’s robust and adaptable solutions can empower you to deliver exceptional user experiences and acquire, or maintain, your competitive edge.
