To speak of white label banking is to speak of that bank that seeks to provide its clients with new high-quality technological, financial services, improving what is offered by other providers, using for this purpose, alliances with technological finance companies (Fintech), which They provide facilities to develop (quickly) versatile and personalized technological platforms, to offer their customers a more agile, competitive and efficient online banking. However, there are some fears of traditional banks when implementing white label solutions; below, we mention the most common fears:
Additional expenses and legacy technology
Implementing new technologies does not always generate enthusiasm in the banking and financial sector; this is generally due to the custom of traditional banks to continue using legacy or obsolete technology, which generates in the long term, higher expenses and operating costs, for example, in some cases the budgets for technological innovation may be relegated to the background, giving priority to the maintenance of obsolete pre-existing platforms.
“Better develop my own platform”
There are traditional banks that believe that it is best to develop their own technological platform from scratch; however, developing their own platform that is competitive, modern, and efficient can take several years, in addition to requiring highly qualified personnel. The problem with this alternative is that during that time (when the new platform is being developed), the bank may be “out of date” in the market concerning its online platform since other competitors will take advantage of this slow implementation. Likewise, once this new platform is implemented, updates and maintenance will be required to attract these clients, which means an additional budget for the bank.
Disagreements with suppliers or former workers
Stop using a pre-existing platform (and move to a new platform) can generate certain disagreements or distances between the providers or workers of the old platform, which can make the people who must make the decision in the bank not take action to avoid inconveniences; however, we must consider that all decisions made must be in favor of the bank and in favor of improving the service given to the end customer, who is used to using platforms more intuitive and versatile technologies (such as social networks and with which you will make comparisons at some point), due to this, there must be an “objective in the bank” decision-making process, good communication with the workers at the time to implement a new platform, in addition to explaining to the people involved how the end-user will benefit from implementing this new platform.
Loss of autonomy or Independence
Many traditional banks believe that if they contract white label banking services by a Fintech, then they will lose their autonomy or independence; however, this is far from reality, since currently, the Fintech companies that offer this service have different monthly plans which can be used for the number of months you want (as a subscription), with no commitment and can be suspended at any time. Another factor that must be taken into account is that the end-user will see at “all times” that the platform belongs to the bank (and not to Fintech); this is where the great advantage of “white label” banking lies. That allows the bank to place its own brand on the technological platform provided by Fintech.
What do you think about this topic? Are there any other traditional banking fears about white label banking that you would like to mention?
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