White label collaborations have grown in depth and breadth over the last decade, now including many more services and capabilities than were previously associated with the phrase. As customers’ needs have grown more sophisticated, such as expanding swiftly into a new market sector, ensuring regulatory compliance, or conducting a digital transformation, this transition has occurred.
Even the largest sell-side businesses are rethinking the infrastructure and services they supply through in-house resources, indicating a growing willingness to employ third-party services. Further business model transformation is unavoidable due to a mix of increasing consumer expectations and fintech competition, all set against a backdrop of low yields, pinched margins, and regulatory constraints. The white-label supplier must focus on delivery while the partner bank determines the strategy. Firms that simply supply one-dimensional “plug and play” solutions will be surpassed by suppliers whose service portfolio allows a higher level of collaboration and integration.
Service That Is Both Sustainable And Scalable
What does a white-label service need to look like now and in the future? While there has always been more going on behind the surface of a white-label relationship, it is now considerably more obvious to the end-user. Based on our expertise, we’ve put up a list of the essential components of a long-term, scalable service proposal.
Infrastructure And Platforms That Are Adaptable – While many white-label collaborations are likely to have begun with the provision of liquidity/pricing in a non-core asset class or geographic markets, such as developing markets or foreign exchange, new requirements emerge quickly. To remain competitive and retain clients, the white-label service provider must provide for ongoing service development through a flexible architecture and different platforms the same way as white label providers in Forex industry do. Providing front-office and trade execution skills swiftly leads to the fulfillment of middle- and back-office requirements, such as increased risk monitoring and management abilities, as well as settling and asset safekeeping. The level of connection and functionality necessary to satisfy these requirements can be extensive, but such efforts in integration are generally rewarded by the expansion and durability of partnerships with partner banks.
Support At All Levels Of The Value Chain – The white-label service provider should provide a comprehensive variety of services in addition to a branded platform to assist a partner bank in improving their own client experience and maintaining 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 usage of existing services and products but also brings the partner bank and white-label service providers closer together in their increasing awareness of customer needs – and strengthens their combined efforts to satisfy those needs.
Model Of Service – Customer satisfaction has always hinged on service quality, but in recent years, the bar has been lifted substantially, notably by a new generation of online retail service providers. Not only must services be available 24 hours a day, seven days a week, but support answers must also be quick and effective.
The IT and network infrastructure that underpins white-label services must provide global reliability, redundancy, and security, as well as reliable backups. The spatial distribution of the customer base would then guide software solutions, but an equilibrium should be struck among the need for local support, market knowledge and experience, language abilities, and available resources, and technological and specialist support which can be provided worldwide level from centers of excellence.
In recent years, the competition to provide a unique user experience has increased dramatically. Customer expectations for a genuine response, customized functionality, and frictionless exchange between devices, platforms, and channels have risen as a result of advancements in other industries.
Open APIs, which make it much simpler to mix a variety of features in a single service or consumer interface, has allowed much of this digital innovation. White-label service providers must guarantee that their platforms can interact easily and fluidly via open APIs to enable partner banks’ need to provide personalized customer experiences. API-based communication and data sharing will become a need for all financial service providers over time, encompassing all middle- and back-office operations, not only at the client interface.
Prepare Ahead Of Time – Regulatory demands on balance sheets, macroeconomic pressures on rates, and competitive challenges on market share are all driving the banking sector to make a strategic change. It’s no longer possible to maintain a long-held preference for private solutions and resources. Banks are incorporating industry utilities and third-party resources as a far more fundamental component of their business models in order to respond to commercial possibilities and consumer requirements promptly and cost-effectively.
This provides an opportunity, but also a problem for white-label service providers: can you produce a personalized solution at scale and speed? Installing trading platforms on desks is one thing; managing corporate operations in a distant country to serve end-investors in several time zones is quite another.
In five years, where will white-labelling be? The solution to this issue is contingent on the banking industry’s future. The desire and necessity for a larger spectrum of banks to collaborate with third-party suppliers to provide personalized, digitized services to end-users are only going to rise.
White-label service providers that are well-positioned will become an important component of a broad and fluid ecosystem in which different parties’ services, talents, and competencies are picked and combined into new, diversified, and interesting service offerings. This is a far cry from the industry’s origins, and it will necessitate the acquisition of new skills, but it is also the natural end of its primary goal. Best practice white-label service supply has always been about helping a client’s capacity to fulfill the demands of their end-customers, whether you call it outsourcing, partnership, or cooperation. In theory, this has not altered, and it will continue to be so in fact.
As demands change, the white-label service provider must invest in new technology and capabilities while also focusing on understanding and supporting unique client goals. Providers that refuse to adapt will quickly become obsolete, expedited by the simplicity and speed with which banks may incorporate new providers.
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