White-label partnerships have grown in depth and breadth over the past decade, now including many more services and capabilities than previously associated with the phrase. As customer needs have become more sophisticated, such as rapidly expanding into a new market sector, ensuring regulatory compliance, or undergoing digital transformation, this transition has occurred.
Even the largest companies on the sell side are rethinking the infrastructure and services they provide through internal resources, indicating a growing willingness to employ third-party services. Further business model transformation is inevitable due to a combination of rising consumer expectations and fintech competition, all against a backdrop of low returns, shrinking margins and regulatory constraints. The white label provider must focus on delivery while the partner bank determines the strategy. Companies that simply provide one-dimensional “plug and play” solutions will be overtaken by vendors whose service portfolio enables a higher level of collaboration and integration.
Service that is both sustainable and scalable
What should a white label service look like now and in the future? While there has always been more behind the surface of a white label relationship, it is now considerably more obvious to the end user. Based on our experience, we have compiled a list of the essential components of a long-term, scalable service proposition.
Infrastructure and platforms that are adaptable – While many white-label collaborations are likely to have started with liquidity/pricing provision in a non-core asset class or geographic market, such as developing markets or currencies, new requirements emerge quickly. To remain competitive and retain customers, the white label service provider must provide continuous service development through flexible architecture and different platforms in the same way that white label providers do in the Forex industry. . Providing front-office and trade execution skills quickly leads to fulfillment of middle- and back-office requirements, such as increased risk control and management capabilities, as well as asset settlement and custody. The level of connectivity and functionality required to meet these requirements can be extensive, but these integration efforts are often rewarded by the expansion and durability of partnerships with partner banks.
Support at all levels of the value chain: The white-label service provider must provide a comprehensive range of services as well as a branded platform to help a partner bank improve its own customer experience and maintain connections. This should include onboarding methods that allow end users to adopt the system quickly, as well as front, middle, and back office support, as well as training, education, and even marketing tools. This strategy not only encourages the use of existing services and products, but also brings partner bank and white-label service providers closer together in their growing awareness of customer needs, and strengthens their combined efforts to meet those needs.
Service Model – Customer satisfaction has always depended on quality of service, but in recent years the bar has been raised substantially, particularly by a new generation of online retail service providers. Services must not only be available 24 hours a day, seven days a week, but support responses must also be quick and effective.
The IT and network infrastructure that supports white-label services must provide global reliability, redundancy, and security, as well as reliable backup. The spatial distribution of the customer base would then guide software solutions, but a balance must be struck between the need for local support, market knowledge and experience, language skills and available resources, and technological and specialized support that can be provided to customers. world-class from centers of excellence.
In recent years, the competition to provide a unique user experience has increased dramatically. Customer expectations for genuine response, personalized functionality, and seamless sharing across devices, platforms, and channels have increased as a result of advances in other industries.
Open APIs, which make it very simple to combine a variety of functions into a single service or consumer interface, have enabled much of this digital innovation. White-label service providers must ensure that their platforms can easily and seamlessly interact through open APIs to enable partner banks to deliver personalized customer experiences. API-based communication and data exchange will become a necessity for all financial service providers over time, encompassing all middle and back-office operations, not just the customer interface.
Prepare ahead of time – Regulatory demands on balance sheets, macroeconomic pressures on rates and competitive challenges on market share are driving the banking sector to make a strategic change. It is no longer possible to maintain a long-standing preference for private solutions and resources. Banks are incorporating industry utilities and third-party resources as a much more fundamental component of their business models to respond to business opportunities and consumer requirements quickly and profitably.
This provides an opportunity, but also a problem for white-label service providers: can you produce a custom solution at scale and speed? Installing trading platforms on desktops is one thing; managing corporate operations in a distant country to serve end investors in multiple time zones is quite another.
In five years, where will the white label be? The solution to this problem depends on the future of the banking industry. The desire and need for a broader spectrum of banks to collaborate with third-party providers to deliver personalized and digitized services to end users will only increase.
Well-positioned white-label service providers will become an important component of a large and fluid ecosystem in which services, talents and competencies from different parties are selected and combined into new, diversified and exciting service offerings. This is a long way from the origins of the industry and will require the acquisition of new skills, but it is also the natural end of its main objective. Providing best practice white label services has always focused on assisting a client’s ability to meet the demands of their end customers, whether it be outsourcing, partnership or cooperation. In theory, this has not changed, and it will remain so in fact.
As demands change, the white-label service provider must invest in new technologies and capabilities, while also focusing on understanding and supporting unique customer goals. Vendors that refuse to adapt will quickly become obsolete, made easier by the ease and speed with which banks can onboard new vendors.