The Ultimate Guide for White Labelling for Fintech & Financial Services

“Play that record, DJ.” White labels, originally part of the music industry, now play a role in almost every sector. For financial and Fintech companies, white labelling allows you to expand your customer base, gauge interest in a potential product and stay relevant in a hyper-competitive market.  At some point, every fintech firm will consider white labelling their underlying platform since almost all tech stacks can be white labelled. With the number of UK fintech companies expected to more than double by 2030, white label style partnerships are likely to increase.

“The increase in white-label fintech infrastructure is interesting because it increases the number of companies that can enter the space by licensing off-the-shelf loan management systems, decision engines, verification platforms and more.” - Sergio Rabiela, vice president of software engineering at OneMain Financial

But, creating a white label proposition is not an easy task and you’ll need to navigate many challenges to create the perfect partnership.

What is a White Label Partnership?

White labelling is when a product or service created by one company (the producer) is then rebranded and sold by a different company (the marketer). Using this approach effectively integrates the service or product into the marketer’s company and makes it look like they created the final product or service.

How Does White Labelling Differ From Other Partnership Arrangements?

If you’re looking for a strategic partnership, white labelling is only one of the options. Introducer, co-branding, or outsourcing are also possibilities.

Introducer or Affiliate Relationships

With introducer or affiliate partners, other related brands recommend your company. For example, a Fintech company may establish introducer or affiliate relationships with accountants, solicitors or IFAs who then recommend your product to the end user. On one hand, affiliate relationships make it easier to manage a small number of introducers and give you access to a new market; for example, non-English speaking countries.  On the other hand, relying on this type of partnership can leave you vulnerable to the whims and demands of your introducers: Rather than focusing on serving customers' needs, you might find yourself trying to keep your introducers happy.

Co-branding

Co-branding is a strategic marketing and advertising relationship between two brands. Unlike white labelling, co-branding creates an equal relationship as the success of one brand directly impacts the success of the other, with both parties working together to achieve common goals and taking credit for the final result.

Apple & MasterCard successfully co-branded to release Apple Pay. Apple needed an established credit card company to allow customers to store their card details on the Apple app, and Mastercard was the first credit card company to do that. This co-branding relationship was a win, win for both parties. Mastercard maintained its competitive edge by allowing customers to harness the latest tech while Apple received the infrastructure support it needed to launch Apple Pay.

Outsourcing

With outsourcing, one company essentially passes a project or certain responsibilities to another company. Arranging a successful outsourcing partnership can be complicated as you’re hiring someone else to complete a function of your business. Typically, outsourcing requires less commitment from both parties, so it works for short-term projects, but, it’s challenging to scale and grow relying solely on outsourcing partners as your partners could change their prices, close their business or make other plans without consulting you. Outsourcing can also sometimes be white labelled but only if you buy a product or service and sell it to the end user under your brand name.

Why You Should Consider Becoming a White Label Provider

White labelling has become a popular solution for Fintech and financial service companies and for good reasons too:

• High-scale growth. Creating a white label relationship with a large brand allows you to tap into their pool of customers, and providers can rapidly expand their offerings as a white label service/product is ready to implement from day one.
  
  
• Boost brand awareness. Expanding your existing client base allows you to build a stronger brand amongst your potential partners as other trusted brands recognise your expertise and product standards.
• Benefit from your partner’s experience & resources. Partnering with bigger, better-known brands allows you, as a white label provider, to bolster your reputation and access your partner's network.
  
  
• Enter new territories. A white label partnership could open new, exciting opportunities to expand into new territories without associated costs or regulatory hassle.
  
  
• Steady cash flow. As a white label provider, you can rely on your partner to create a steady cash flow for your business, which you can then direct towards further growth.
  
  
• Mutual growth & support. Your white-label partner’s success is your own as their sales directly contribute to your bottom line. Supporting them to learn more about your product and service and its many benefits is essential.
  
  
• Exit strategy. Establishing a positive white label relationship could serve as a savvy exit strategy as you might be able to sell your company to the brand that’s white labelling your platform.
  
  
• Improved value. Increased revenue, greater exit potential and additional revenue opportunities are also likely to increase the value of your company overall. 

Why You Shouldn’t Consider a White Label Partnership

Sounds great, but what’s the catch? Like all partnerships, white labelling isn’t without its disadvantages. You’ll need to build a stable relationship with your white label partner to avoid any misunderstandings and make sure they understand how your product or service works. For white-label providers, this type of partnership can dilute or weaken your brand identity as the end customer recognises the other brand as the expert rather than yours. So it’s essential to continue promoting your brand, both through your marketing campaigns and internally amongst your employees to maintain your brand reputation.

What Should Your White Label Proposition Include?

When creating a white label proposition, you will need to consider whether you’ll use a front-facing or back-facing model. A front-facing model allows you to work directly with your clients or customers and appear as part of your partners’ team, while a back-facing model does not allow this communication directly with clients and customers. Companies often use this model when there are concerns about competition and client poaching.

All About the Money

What do commercials look like with a white label project?

One of the most critical and complicated issues is the commercial side of white labelling, especially for companies looking to work with white label providers. There are three ways to start talking about money:

1. Mark-up: Determine the overall cost of the service and add an additional percentage as a markup fee. Your white label partner then gets to keep the markup.
2. Revenue Share: Both partners split the revenue by 50/50, 60/40, 80/20 — you get the idea.
3. Licencing Fees: Allow white label partners to purchase your technology for X amount over Y years.

We suggest conducting market research to establish how much the product or service can sell for and still generate a good return. Otherwise, you might end up giving away too much, at too low a price point and risk your white label offering becoming commercially unviable. It will be essential to consider any additional costs, for example; support or marketing costs that could impact the expected profit margin. Working out three different commercial models (one to break even, one to remain competitive and one above market average) will give you a good idea if your white label product is viable.

Other Things to Consider

When creating your white label proposition, you also want to consider whether your relationship is exclusive, for example; are there any restrictions on how and where the marketer can resell the product? Are product changes or modifications allowed? What results do you expect within the first year? Who owns intellectual property rights? And who’s responsible for regulatory implications? You’ll need to discuss these questions with your potential white label partner and make sure you’re on the same page. It’s also a good idea to have a formal contract drafted to avoid any misunderstandings.

What Does a Dream White-Label Partner Look Like?

Much like dating, it’s essential to pick a good white-label partner. You don’t want to jump into bed with just anyone.

Your white label partner should:

• Share similar goals and visions with your company.
• Provide access to a strong customer base and consistent revenue.
• Already have a strong marketing strategy.
• Have a good reputation and trading history and be a company you can trust.
• Understand what it takes to be a good white label partner.
• Offer excellent support services to help you learn and grow as a business.
• Provide clear contract terms. A good working relationship requires clear T&Cs and contracts.

As a Dream White-Label Provider, You Need To...

Your market position as a white label provider relies not only on a quality product but also on your ability to play nice and deliver outstanding results. You should aim to;

• Provide a reliable product or service that matches your partners’ needs.
• Take an innovative approach, always looking for new ways to improve your partners’ solutions or services.
• Establish a good reputation and trading history. Or for those just getting started, create sound processes and reliable systems.
• Support your partner by helping to address customer complaints and troubleshoot any issues.
• Deliver a transparent contract with a minimum lock-in period and which outlines expected fees.
• Allow potential partners to test the product or service beforehand. They need to understand how the product or service will work for their customers and a test drive is a great way to achieve this.

Things to Avoid for a Successful White-Label Relationship

Creating a sound white label partnership is all about building trust and reaching a mutual understanding. When trying to find a white label partner, make sure to avoid these behaviours:

• Low price points: Low price points make it look like you’re cutting corners somewhere, which can raise red flags as potential partners may anticipate encountering poor standards and problems further into the partnership.
• Poor communication: You will need to be responsive to your partners’ needs and provide a product or service that represents their brand.
• Poor understanding of their brand: You will need to fully understand your partners’ vision and goals, as you’ll become an extension of their brand.

Fintech and Financial Services White Label Providers

“The banking transformation has begun, we’re enabling customers to pick and choose the applications and services they need and how they use them” — Anne Boden, CEO of Starling Bank.

Starling Bank

By providing a white labelling service to Fintech companies, Starling Bank is disrupting the status quo and leveraging their platform to challenge traditional banks. The platform makes it easy for startups to provide customers with branded bank accounts and payment services like debit cards without lengthy development periods or complex legal processes.

Currencycloud

Currencycloud provides cross-border payment and FX services to companies like Monese, Revolut, and Paddle. These brands then white label Currencycloud’s API to cost-effectively deliver transparent payments and FX via a global and fully compliant payment network.

Marketing Your White Label Proposition

If you decide to go down the white label road, you’ll need a strong marketing strategy to promote your brand and reach potential white label partners. Creating a strategy that targets your ideal audience and promotes your messaging across multiple channels, will allow you to achieve the best results and connect with partners who could transform your business. As part of your marketing strategy, you’ll want to focus on education and brand awareness content like PR, ebooks and webinars. This can help you to establish your company as a thought-leader and attract the right kind of attention.

Here at Growth Gorilla, we can help you determine the right market positioning for your white label solution, create a marketing strategy to promote your proposition and build the infrastructure you need to drive a successful partnership. Find out more about marketing your white label proposition by scheduling a free consultation with our growth marketing expert.

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