When Is the Utilization of a White-Label FinTech Platform Necessary?
Posted by Sofia Levine
from the Business category at
26 Feb 2025 08:01:46 am.
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In this economy, the overall development of companiesinvolved in FinTech services often comes down to time-to-market factors and thecost-efficiency of services provided to core customers. Let’s say, for example,that you are the owner of a small FinTech company, and you are looking toexpand your services and reduce the overall workload of your employees.<o:p></o:p>
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Why will you, then, invest in a white-label FintTechplatform? A couple of reasons, actually. Number one, in the digital medium,time is money, and money is king. In order to be competitive and have a chanceat positively disrupting your activity sector, the product you launch mustquickly capitalize on the technological developments happening in the digitalinvestment space.<o:p></o:p>
Private-label platforms already benefit from the necessary technologicalinfrastructure to accelerate the deployment process of your digital servicesand are also significantly more cost-effective than maintaining your portal’sinfrastructure in-house with the help of a separate team. Scaling a digital,white-label FinTech platform is no easy business, as the operations necessaryto expand your services will typically require upfront and operational coststhat are unmanageable by most enterprises active in the US. Sure, it can bedone, and it’s an option preferred by some companies. But, it’s not a wisechoice if cost-savings are a priority. <o:p></o:p>
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Is That All?<o:p></o:p>
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No, not by a long shot. The FaaS sector is predicted to growat an accelerated pace in the next couple of years and reach a market size thatwill probablysurpass $1.35 trillion. White-label services, whether we are talking aboutdigital platforms for FinTechs or other industries, are all the rage right now,as most companies are faced with significant staff shortages and are having difficultiesin managing the back-end elements of their websites or digital platformsinternally. <o:p></o:p>
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Private-label platforms are efficient in accelerating thedevelopment time of your financial services, necessitate lower maintenancecosts than internally developed investment portals, and are a solution toconsider if you lack the in-house expertise to create a FinTech solution withminimal external funding. Sure, your teams might be experienced in creatingdigital banking services for niche audiences. But this doesn’t mean theybenefit from the technical prowess to develop your enterprise’s platform from scratch.<o:p></o:p>
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White-label FinTech platforms can allow your staff toconcentrate on their core competencies, test new niche products before they areready for mass release, and help your senior management find partnershipopportunities with financial platforms that share your goals and aspirations. TL;DR: Private-label platforms are simply a more advantageous choice and canprovide FinTechs with the technological foundation necessary to cause positivedisruption in target sectors. <o:p></o:p>
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A Fantastic Wayto Diversify Your Revenue Streams <o:p></o:p>
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Demand for white-label FinTech solutions is primarilyled by competitive pressure. Private-label FinTech companies offer highlycustomizable digital solutions that are already compatible with the CRMs and accountingapplications used by the vast majority of non-banking financial companies.Truth is, both NBCs and conventional banking institutions are looking to expandon the services provided to customers and offer customizable portfoliomanagement tools that can integrate multiple investment classes. <o:p></o:p>
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But, there’s an issue: Technological expansion istime-consuming and can severely limit the existing services provided tocustomers. Private-label platforms eliminate these issues, as the technologicalresources you require are right there for the taking. Since they are modular,white-label portals allow FinTechs to expand in niche markets and offer a broadspectrum of financial services that, when combined, could create multiplerevenue streams for their brand. <o:p></o:p>
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Sure, a professionallycreated white-label FinTech platform will not be exactly cheap, as mostsuch platforms work on subscription-based models, whose prices will beinfluenced by the customization you require on the portal and the costs formaintaining the platform’s infrastructure optimized for visitors. However, byand large, white-label models are significantly cheaper thaninternally-developed ones. <o:p></o:p>
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Let’s Talk Numbers<o:p></o:p>
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For the sake of this argument, let’s assume you are amid-sized FinTech company, and you are looking to expand on the servicesprovided to customers and launch a digital wallet platform developed internallyby a team of highly skilled IT technicians. Likewise, let’s assume you aretargeting around 100,000 users in the first year of operations and that you areplanning to launch the portal in less than 12 months. <o:p></o:p>
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Finding highly skilled technicians for this project can bechallenging and most definitely not cheap. For such an aggressive timeline, youwill probably require at least five full-time developers, two or three qualityassurance officers, one product manager, and at least one compliance officer.None of these jobs come cheap. So, only the salaries of the development teamwill probably cost you more than $1 million per year. <o:p></o:p>
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On top of that, you will also have to consider the costassociated with the platform’s cloud hosting and the ongoing maintenance andupdates required to keep the platform usable and competitive with rivalservices. All in all, the cost of launching the aforementioned digital walletplatform could be anywhere between $1-$1.5 million and require a couple ofhundred thousand per year in maintenance costs alone. But that’s option A.<o:p></o:p>
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In the End, It’sAll About the Money<o:p></o:p>
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Option B is to utilize a white-label FinTech platform thatalready benefits from the infrastructure required to expand your services andlaunch your digital products. Let’s say the portal already comes bundled withthe functionality you require. In that case, you will probably only need toinvest in UI/UX modifications and pay the one-time setup fee demanded by theplatform’s provider, as well as a monthly subscription. <o:p></o:p>
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It will not exactly be cheap, as subscriptions for alarge-scale private-label platform can, in some cases, cost more than $10,000per year. That said, when it’s all said and done, the yearly costs of anoutsourced white-label Fintech portal will be around $150-$200k, while internallydeveloped ones will cost, most likely, more than a million. <o:p></o:p>
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Private-label platforms require less direct involvement fromyour employees, involve less operational costs, and are easily customizable,which is a significant advantage, as your brand’s image will need to seamlesslyintegrate with the platform’s core functionalities. Plus, white-label FinTechplatforms benefit from regular updates that can patch up any security holesdiscovered during internal back-end audits and come pre-built with compliancemonitor tools that eliminate the risks of your services failing to adhere toregulatory practices. For most FinTech, they are simply a better deal, andthat’s why their adoption has become commonplace in the digital medium.<o:p></o:p>
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