What is White Labeling in banking?

The term "white label" has become synonymous with the world of financial services. If you're not familiar with this phrase, then perhaps you've heard about something called BaaS or even Neo Banking Platforms. But what exactly do these terms mean? And why are they becoming increasingly popular within the industry?

In short, white label means that we can use someone else's product -- be it software or hardware -- without having to pay for any licensing fees or royalties. We don't have to worry about developing our own version of an application because somebody else already did all the hard work for us. What's more, if we want to change things around slightly, we just need to update one line of code instead of starting from scratch like we would when building out an entirely new system. This process is known as “white labelling”.

So how did we get here? Well, back in 2009, banks started offering digital wallets to customers who wanted to make payments using mobile devices. At first, the idea was met with skepticism, but eventually people began to embrace this concept. Soon after, other institutions got involved, such as PayPal, Square, Apple Pay, Google Wallet, and others.

This led to the creation of a whole ecosystem of apps which helped consumers manage their finances by making payment transactions easier than ever before. However, since each company had its own set of rules and regulations regarding how much information users were allowed to share with merchants, it became impractical to develop a completely unique solution for every single institution. In order to solve this problem, companies came up with the idea of creating a central marketplace where anyone could sell their applications to different organizations. These solutions were referred to as BaaS platforms.

As time went on, many firms chose to build their own versions of BaaS platforms rather than relying on existing ones, so they created their very own Neo Banks. Examples include Revolut, Monzo Bank, N26, Transferwise, Wirex, Monese, etc. The rise of this type of technology meant that there was now no longer any reason for small businesses to create their own digital wallet. Instead, they could simply sign up with one of the larger players and enjoy access to a diverse range of features.

But while a lot of innovation took place over the last decade, some aspects remained unchanged. For example, most modern financial technologies still operate under the same principles as traditional brick-and-mortar banks. That being said, in recent years, several startups have tried to reinvent banking altogether. One way they plan to achieve this goal is through the use of blockchain technology.

We'll talk about white label FinTech platforms next, but let's start with a look at how we got to this point in the first place.

What is white label finance?

A few decades ago, the majority of financial transactions taking place across the globe used paper money. Although this method has been replaced by electronic forms of currency, it wasn't until recently that it saw widespread adoption. Today, almost everyone uses credit cards to complete purchases online. As well as providing convenience for both parties, this form of payment also benefits retailers by allowing them to track spending habits.

However, despite the fact that plastic card usage is increasing rapidly everywhere, a number of people prefer to conduct business face-to-face whenever possible. Why spend $200+ dollars on a pair of shoes when you can buy them for less than half that price in person? Some argue that physical stores offer better customer service too.

These factors combined have contributed towards an increase in demand for cashless systems. It seems like it might only be a matter of time before everyone ends up carrying a smartphone in their pocket 24/7. So why isn't everybody doing it yet?

Well, although digital currencies like Bitcoin provide anonymity which is great for privacy, they aren't ideal for day-to-day shopping. Plus, if your phone gets stolen, you lose everything. On top of this, many countries still ban cryptocurrency outright.

That's why it makes sense to use a standard debit card to purchase goods and services. Not only will you avoid paying transaction fees, but it also provides peace of mind knowing that nothing sensitive will end up on record should anything go wrong. You won't even have to carry ID with you! In the case of fraud, authorities will know that you bought those shoes in New York City instead of Los Angeles.

When it comes to purchasing items online, though, it may seem difficult to find a secure option. After all, how do you verify that the site you're buying from actually exists? How do you know whether or not the seller is legitimate? While there are certainly plenty of ways to protect yourself against scams, they come at a hefty price tag.

Fortunately, there is another option available to you. Companies like VaroPay allow shoppers to use their Visa Debit Cards directly from their smartphones. Unlike regular accounts, however, these types of virtual cards cannot be accessed internationally, nor can they be converted into cryptocurrencies. They are purely designed for online commerce purposes.

If you live somewhere where crypto trading is illegal, or if you're looking for a way to bypass international restrictions and transfer funds abroad freely, then this might be right up your alley. However, if you're just trying to keep tabs on your personal finances, then you may wish to explore other options.

What does white label mean in Fintech?

Many believe that the future belongs to decentralized networks, particularly those built upon blockchains. Since blockchains store data on multiple nodes simultaneously, they are resistant to attacks. Furthermore, they are extremely fast thanks to the distributed nature of the network itself.

One thing that hasn't changed since the dawn of human civilization is the desire to exchange value between two individuals. Whether that value is expressed through gold, fiat currency, or cryptocurrency, humans always seek to convert assets into other assets, thereby improving their overall wealth. When the internet emerged, we didn't see a sudden shift away from physical exchanges of goods and services. Instead, it merely provided a convenient alternative to meet certain needs.

Today, we continue to rely heavily on physical locations to transact business. Yet, due to the limitations imposed by physical space, many entrepreneurs have begun exploring alternatives. What if we could circumvent geographical boundaries entirely? Is it really necessary to move millions of pounds worth of bitcoin across borders in order to trade it?

While it's true that there are still plenty of obstacles preventing mass adoption, the technology behind cryptocurrencies continues to improve. Thanks to innovations like lightning speed transfers and near instant settlement times via smart contracts, it's unlikely that anyone will have trouble transacting cryptocurrencies anymore.

Although the vast majority of the global population remains skeptical, many experts predict that blockchain technology will soon revolutionize the entire economy. With the help of white label FinTech providers, anyone willing to innovate can jumpstart their venture.

Of course, this doesn't necessarily apply to every field of endeavor. There are plenty of industries which haven't seen a significant improvement over the past century. For instance, consider the following quote taken from an article published on Fast Company:

"You can easily imagine how the retail sector, which has largely relied on old models for decades, is struggling to adapt."

Even though the above statement holds true today, it's easy to forget that the retail sector underwent massive changes during the early 2000s. At the time, Amazon opened its doors to the public and introduced the concept of click & collect. Meanwhile, Walmart made waves by introducing self-checkout kiosks and implementing barcode scanners.

Fast forward 10 years later, and we now witness countless innovations coming out of major brands like Target, Starbucks, McDonalds, and Disney. Even though the aforementioned examples represent only a fraction of the total amount of change that occurred over the span of a decade, it goes to show that the trend toward digitization never truly stopped.

It's clear that the pace of technological progress has increased significantly since the beginning of the 21st Century. Many anticipate that further advancements will occur sooner than later. That being said, the question still remains as to whether or not society will be ready for radical transformation.

What is white label Fintech?

Since the advent of BaaS platforms, digital wallets have continued to grow in popularity. According to figures released by Statista, more than 80% of adults aged 18-34 in the United States owned a digital wallet in 2019.

In addition to helping facilitate transactions on a daily basis, digital wallets give users control over their private keys. By storing them securely offline, users can ensure that nobody besides themselves can access their funds. Due to the inherent security measures baked into these tools, many people feel safer signing up with a reputable provider.

Another benefit associated with the use of digital wallets is the ability to send money anywhere in the world instantly. No more waiting days for wires to arrive at your doorstep! With the exception of peer-to-peer lending, sending money overseas is currently impossible without using a third party intermediary. Fortunately, these issues appear to be slowly fading away.

When you think of the term “bank”, you probably picture something that resembles an actual building with a vault full of cash inside. But over time, more and more people have become comfortable using online services to manage their finances. These days, there are many types of financial institutions out there offering different kinds of accounts for individuals or businesses.

One of these types is called “banking as a service”, which allows customers to access money from any device at anytime without having to physically visit a branch. This type of product has been around since the 1990s but only recently has it taken off like wildfire among consumers who want greater convenience when managing their personal or business finances.

This article will explain how this new form of digital banking works so you can understand better why it's important, and why you should care about how your bank is branded. We'll also look into some of the technologies behind it all.

What is plug and play in banking?

The concept of plug and play was introduced back in the early 1970s. It describes a way of combining two separate pieces of hardware to make one whole unit. The first piece of hardware would be plugged into another, smaller piece of hardware. In other words, it acts as a connector between the two.

For example, imagine if you wanted to connect a vacuum cleaner to a power strip. You'd need to buy both separately before connecting them together. However, if you bought just the vacuum cleaner part, then connected that directly to the wall socket, you wouldn't get much benefit because the power strip doesn't offer anything extra. By buying both parts together though, you could combine the functionality of both devices and achieve a lot more than either of those individual purchases alone.

In terms of finance, we're talking about "plugging" our bank account to our phone or tablet via mobile apps, while the "play" refers to the ability to send payments straight from our phones. And just like the vacuum cleaner/power strip analogy above, the combination of these two features makes up the entire "plug and play" experience.

This approach to banking started gaining popularity in 2017 after Apple launched its iPhone X (which had Face ID), which allowed users to unlock their phones through facial recognition instead of entering a PIN code or password. This meant they were no longer required to carry a physical keychain anymore, making carrying wallets unnecessary. As such, it made sense for companies to create similar solutions for smartphones, especially ones that offered secure payment processing capabilities.

It wasn't long until major tech brands got involved. For instance, PayPal created a version of itself specifically designed for Android called Paydiant and Google unveiled its own Wallet feature built into Chrome browsers. Other big names including Amazon and Facebook followed suit. All of these companies saw a huge demand for their respective products, so they jumped onboard.

At the same time, smartphone manufacturers began integrating NFC chips into their devices. This allowed customers to pay for things hands-free using near field communication (NFC). When paired with the right wallet app, they could easily transfer funds from their bank accounts to retailers' credit cards.

As more people became accustomed to paying for goods and services digitally, the idea of plug-and-playing grew even stronger. Eventually, a number of players entered the space, including Square, Stripe, Paycase, Klarna, BillDesk, VaroPay, GoDaddy Cash, TransferWise, Revolut, Wirecard, Monzo Bank, Yodlee, etc.

These firms combined various functions together to provide a complete solution for anyone looking to start accepting payments online -- whether for themselves or others. They came up with ways to integrate existing customer information into their platforms, allowing users to seamlessly move money across multiple accounts, convert currencies, and process wire transfers. Most importantly, they kept costs low by leveraging APIs provided by external partners.

The result is an industry worth billions of dollars today. Some estimates put annual revenues in 2018 around $10 billion for the banking sector worldwide.

How does banking as a service work?

There are three main components to every BaaS system:

A cloud computing provider

An API management tool

Software development kits

Let's break down each component individually below.

1. A Cloud Computing Provider

Cloud computing providers host data and applications in remote servers, allowing organizations to scale quickly without having to invest heavily upfront in infrastructure. Banks typically choose cloud providers based on speed, reliability, security, scalability, and support.

2. An API Management Tool

API stands for application programming interface. This is essentially a set of rules for developers to follow when interacting with their company's backend systems. Each organization uses its own unique set of rules depending on its specific needs. For instance, Uber might require drivers to input certain details during signup, whereas Netflix requires users to upload photos of their driver references.

APIs allow developers to build their own tools using prewritten codes known as SDKs. With the help of these APIs, companies can rapidly develop new tools, products, and services. This is particularly useful for startups that don't yet have the resources necessary to hire enough employees to create everything internally.

3. Software Development Kits

SDKs contain instructions for developers to utilize within their projects. Many SDKS include libraries that give programmers easy access to commonly used programs, files, documents, and databases.

Many BaaS vendors offer free SDKs for download. Others charge a fee for access to their proprietary SDKs, usually ranging anywhere from $50 to thousands per year. To keep prices affordable, most companies bundle SDKs with their offerings, giving developers access to all the functionality needed without needing to purchase additional licenses.

Some examples of popular SDKs include:

GoCardless -- Payments SDK

Revolut -- Financial Services SDK

Stripe -- Payment Processing SDK

Square Inc. -- Point Of Sale SDK

VeroPay -- Online Money Transfers SDK

Transferwise -- International Remittance Platform SDK

Yodlee -- Customer Data & Analytics SDK

Which technology is widely used by banks?

To see exactly which technologies are being utilized by banking giants, check out the infographic below.

Notably absent from the list above are blockchain-based apps. While some banks may consider incorporating cryptocurrencies into their future products, none currently offers fully integrated cryptocurrency exchanges.

However, many of the larger banks, namely HSBC, RBS, Barclays, UBS, and JP Morgan Chase, are experimenting with blockchain technology. One reason why is due to recent scandals involving fraud committed against crypto investors in Japan. According to a report published by Bloomberg last month, Japanese authorities confiscated nearly 1 million bitcoins belonging to Mt Gox, a bitcoin exchange once valued at over US$400 million, following allegations of fraudulent activity surrounding the site.

Another reason is because banks believe blockchain technology provides transparency, efficiency, and immutability. Blockchain transactions are irreversible, unlike regular ledgers which can potentially be altered later on. Since blockchains operate independently of central control, they make it difficult for hackers to attack.

Additionally, distributed ledger networks eliminate intermediaries, thus reducing transaction fees. Finally, they enable smart contracts, which automate processes and reduce manual labor. Smart contracts are basically computer protocols written onto immutable blocks of shared records. Once executed, they automatically enforce predefined conditions without human intervention.

While blockchain technology isn't widely adopted yet, it seems like a logical step forward for the financial industry. After all, it's hard to deny that Bitcoin's value plummeted overnight thanks to the infamous MtGox scandal. Perhaps we'll soon witness a similar event happening in the world of traditional fiat currency.

In today’s modern economy, we see businesses operating like startups with little or no legacy to fall back upon. For these new ventures, they need to find solutions that will help them grow fast without having to invest too much time, money, and effort into building out an infrastructure.

This has led many small business owners to turn to Software As A Service (SaaS), also known as cloud computing for its ability to provide flexible, scalable, and reliable services at a lower cost than traditional IT systems. However, while this may be ideal for entrepreneurs who want to keep costs down and focus on growing their company, there are still some limitations when using SaaS technology such as data security concerns.

To address these issues, another option is to use White Label Fintech Platforms (WLFP). The term WLFP was coined by industry experts to describe how banks can create branded apps that look and feel like their competitors but have all of the same features and benefits.

The idea behind this solution is simple – instead of requiring users to download a separate application from one of several different developers, they can access everything through one seamless interface. This means less work for customers and more revenue for banks. It also helps reduce customer churn since clients don't have to switch between applications every time they make a transaction.

But before you start thinking about which bank should you choose, let's first break down exactly what "White Labelling" means. What does it mean if your bank doesn't offer any sort of mobile banking service? Does it mean you won't receive alerts via text message? Will you lose any perks? And how do you know that the provider isn't charging extra fees or hidden charges just because they're not official partners?

Let's discuss each question individually so you can get answers to those questions along with other important ones, including whether you'll even notice the difference between a "regular" app versus a "branded" version.

Which type of software system is banking software and why?

Before getting started on choosing a bank, it's important to understand the differences between various types of financial institutions. Banks come in two main categories – retail banking and wholesale banking. Retail banking refers to providing personal accounts and loans to individuals, whereas wholesale banking deals with large corporations and institutional investors. Wholesale banks tend to provide higher interest rates on savings accounts compared to retail banks due to larger deposits.

Whole sale banks also carry additional risks because of high liquidity requirements and exposure to foreign exchange fluctuations.

Which banking system is the best?

While most people think of Bank of America when they hear about whole-sale banks, it turns out that it is actually only the second largest worldwide after HSBC Holdings PLC. In fact, according to Statista, the top five biggest global banks are Royal Bank of Scotland Group Plc, JPMorgan Chase & Co., Citigroup Inc., Wells Fargo & Company, and UBS AG. That being said, however, none of the abovementioned giants charge anything close to the low prices offered by smaller banks or credit unions.

If you would prefer to shop around for a cheaper alternative, consider checking out local community banks and credit unions. These organizations often require minimal paperwork and offers competitive pricing options.

Also, bear in mind that you shouldn't always go for the cheapest option available. While price might seem to matter, remember that cheap comes at a cost. You could end up paying higher monthly fees over the course of years to avoid incurring penalties.

What is the safest banking system?

When looking for a safe way to store your funds, the number one consideration is safety. So, what makes a financial institution safer than others?

First off, you must ensure that the organization provides FDIC insurance coverage. If something happens to the bank, then your money will be protected. Another thing to check is whether they offer free ATM withdrawals. Some banks only allow certain ATMs to accept debit card transactions, and others limit withdrawal amounts to $100 per day.

Another factor to consider is whether the firm offers international banking facilities. Many countries impose restrictions on cross border transfers, especially when it comes to currency conversion. Also, note that overseas branches aren't subject to the same regulations as domestic offices.

Finally, ask yourself whether the bank employs licensed professionals who hold certifications from internationally recognized bodies such as the Chartered Institute of Securities Commodities and Risk Management (CISCRM) or CFA International Foundation.

These credentials demonstrate that employees have gone beyond classroom training and earned professional recognition for their knowledge and expertise. They also signify that the company follows strict compliance rules set forth by regulatory agencies.

Which is the No 1 bank in world?

According to Forbes, American Express Card Services, formerly called MBNA Corporation, holds the position of the largest credit card issuer in North America. With over 40 million active members across 30 states and Canada, Amex ranks #1 for both MasterCard and Visa.

However, despite its massive size, AmEx has struggled financially in recent times. Although AmEx was able to weather the 2008 economic crisis better than many other banks thanks to its strong balance sheet, things haven't turned out quite as well for the company in 2015. As reported by MarketWatch, AmEx lost almost $200 million last year due to falling profits that were partially caused by declining spending among consumers.

Despite losing millions of dollars, AmEx remains optimistic about the future. According to CEO Kenneth Chenault, the company expects to return to profitability within three years. He believes that the company's success hinges on its ability to adapt quickly to changes in consumer behavior.

So now that you've learned all about the ins and outs of white labelling, it's time to narrow down your choices! To learn more about the wide variety of banking solutions on the market today, visit our article on fintech platforms.

The Benefits of BaaS for Banks

When you think about banks, one thing comes immediately to mind - security. The more secure your bank account is, the safer you feel when using it.

It’s not just a matter of protecting yourself against fraud, but also from cyberattacks. It’s important to keep your financial information safe since hackers have become increasingly sophisticated over recent years. In fact, cybersecurity experts say cybercriminals are now targeting individuals at all levels across industries including small business owners, CEOs, CFOs, investors, executives, government officials, law enforcement officers, and even celebrities.

There has been a significant rise in data breaches globally which means that everyone needs their online accounts protected. That’s why there are many options available if you want to ensure your personal information is always safe.

If you use your bank account often, then you can install a free app called BankBot which scans your bank statements for suspicious activity so you know what’s going on before any unauthorized transactions happen.

You should never share your password with anyone else because this leaves you vulnerable to identity theft. Instead, consider getting a two-factor authentication method such as Google Authenticator or Authy.

Another way to protect yourself is by only logging onto your bank website via HTTPS and ensuring that your browser shows “HTTPS Everywhere” whenever possible. This ensures you’re connected securely every time you visit your bank’s site instead of connecting through unsecured HTTP connections.

Use strong passwords to prevent others from gaining access to your bank account.