Defining White Label Banking as a Service and How It Can Help You Serve Your Customers
Each step of your customer journey you’ve created a user experience that is branded. Your customer knows you and trusts you.
Then, your customer reaches a step of the journey that involves finances: an estimator, bill payment, payroll, or even just a stop to refer to their own financial information before moving forward. They leave your platform to complete this step…and hopefully to return.
If your business is not a financial institution, this is a common experience for many customers.
For decades, these services have only been offered by traditional banks. As a regulated industry, the banking sector requires specific licensing under strict requirements and guidelines put in place to protect customers. However, in a quickly shifting digital world, the banking system is changing and becoming more accessible for businesses to enter.
This is where white label banking as a service comes in, allowing you to use an existing licensed infrastructure to provide these services directly to your customers.
Not only does this streamline your customer’s journey and expand your service offering, it also allows you to control your user’s experience completely: tailoring your services to what they need rather than using a generic banking service that was designed as an all-purpose solution for many different types of businesses.
You can now have a highly-specialized solution that provides the exact experience your customers are looking for, while packaged in your familiar and trustworthy brand.
Defining White Label Banking as a Service
To better understand how you can offer financial services directly to your customers without being a bank yourself, let’s start by defining the components that make up white label banking as a service.
What is Banking as a Service (BaaS)?
Banking as a service, or BaaS, is a digital service that contains the infrastructure for organizations to use as a platform to provide their customers or employees with financial services.
This infrastructure includes the application programming interface (API) that connects your service to the regulated banking system, as well as the technical software support (technology stack) that helps run your service.
If you’re familiar with SaaS (software as a service), BaaS works in a similar way. Traditionally, software used to be sold in a box and downloaded to your computer via some physical form. These days, software is a service: one that you subscribe to on a monthly or annual basis to use another company’s technology as a process or tool in your own workflow.
Banking as a Service works similarly. Instead of using another financial institution for the financial step of your customer journey or internal processes, you can subscribe to a BaaS provider which gives your company the infrastructure, security, and regulation requirements to offer that financial service directly to your customers, or to directly implement into your workflow.
This allows you to create your own financial services by using a fully-developed and unbranded platform that can then be customized and rebranded to connect directly to your user.
What is a White Label Bank?
A white label bank, also known as a private label bank, is the rebranded version of the BaaS platform.
Just as in any other industry, white labeling refers to using an existing product or service created by one company, and rebranding it to sell as a product or service of another company. In white label banking, your company takes the existing infrastructure of a BaaS platform (provided by another company), and repackages it to offer directly to your users. This has been common practice in retail for decades, and is now becoming an increasingly popular solution in digital banking.
Many modern financial start-ups run their entire business model as a white label bank: offering micro financial services, and acting as the customer’s point of contact digitally. This is where neobanks and fintechs live – providing an array of services while only operating on the user-facing, and sometimes interfacing, aspects of the digital banking service.
White label banking is not only a solution for those wanting to enter the banking world, however. It also serves as a powerful business solution for brands that have a financial component included in their workflow or customer journey. This could include customer payments, financial calculators, qualifying algorithms, data aggregation, identity verification, and more.
This gives you the opportunity to streamline your processes, add sources or revenue, and have control over the entire user experience without investing your time and resources into developing your own infrastructure and becoming licensed as a financial institution.
With the simplicity of white label banking as a service, you can cut down the time it takes to bring your product or service to market as well as the cost of in-house development. Instead, you can continue to focus on your business model and let fintech experts create a product that integrates directly into your system for the highest quality end product.
By using an existing and proven infrastructure, your barrier to entry is significantly diminished and you can be an immediate player in the fintech space while only focusing on the user experience.
Who Should Use a Service Like White Label Banking?
Any organization that has a financial component causing a pain point in their customer journey may benefit from working with a vendor specializing in white label banking services to configure their own world-class user experience.
Since you are already interfacing with customer funds on a regular basis, you can offer better specialized service, and keep your customers on your branded platform.
There are many ways organizations use white label banking as a service to fill the gap in their process. Depending on the use case, white label banking can expand your current product or service offering, improve user experience, decrease costs associated with multi-vendor solutions, or make your workflow more efficient.
The most common uses for white label banking often fall into these categories:
Moving Money
Either incoming from customers, or outgoing through payroll, the movement of money is a constant component of any business. A white label banking solution can reduce fees on either end of a transaction, while also keeping your user on your platform for one cohesive and branded experience.
Secure Verification
Another service often supplied by traditional banks is identity and financial verification that removes your user from your platform for a service provided by a third party. With white label banking as a service, you can create a custom interface specifically designed to meet your verification requirements while remaining compliant and secure.
This can quickly streamline customer acquisition and onboarding processes.
Securing Funds
Whether holding funds in the form of savings and checking accounts, or offering loans, securing the financial assets of another party requires being fully-licensed as a financial institution.
Without transitioning your organization into an institution, you can still offer services like these to your customers as a white label bank. Instead of being licensed as your own entity, you use the existing licenses of your BaaS provider.
This allows you to expand your service offering quickly while remaining within regulation.
Account Aggregation
Streamlining your user experience can include consolidating financial information from various secure sources. To access these and interface with other financial institutions also requires proper licensing.
This is licensed through your BaaS provider so you can design the user experience you want while helping users access, view, and understand their own financial information within your designated format.
The Benefits of White Label Banking with FirsTech
In addition to the bottom line savings of directly integrating BaaS into your workflow, white label financial solutions through FirsTech can benefit your company in a variety of ways:
Bank Focused Solutions
FirsTech, a wholly-owned subsidiary of Busey Bank, understands the unique challenges and objectives faced by community financial institutions. Through our white label banking as a service solution FirsTech is uniquely qualified to help build an exceptional customers experience for other Fis.
Customer Experience
Maintain complete control over the customer experience and tailor it to fulfill commercial customer’s needs. Give your customers the payment options they need at a fraction of the cost of internally developed options.
Cost Savings
Developing banking infrastructure is an expensive endeavor. A white label provider like FirsTech saves you time and money in development, while remaining focused on your core offerings and customer experience.
Non-Interest Income
FirsTech helps community banks generate non-interest based income that adds to your bottom line.
Why Choose White Label Banking Services?
Whether through your customer service, product offering, or a combination of everything you do…you make your customer’s lives better.
White label banking services can be the tool you use to expand customer relationships. It allows you to streamline the customer journey and have further control in their experience while adding to your bottom line.
The number of unique applications available through white label banking is endless. Banks have lagged behind while online retailers have redefined consumers’ expectations for an intuitive, and integrated payment solution. Now, through white label banking services, you can keep your organization relevant in today’s modern digital world.