Banking firms are expected to process transactions in real-time, assure frequent feature releases, expand infrastructure on demand, and ensure compliance with all applicable regulations when providing services in a highly competitive market.
A growing number of financial institutions are integrating white-label banking solutions to satisfy end-users needs better while also generating profit. While white-label banking provides the advantage of decreasing costs and time to market when compared to custom software engineering, it also has several disadvantages that fintech companies should consider before taking this route.
Our software experts at Surf explained the critical challenges with white-label banking software and how to deal with them. But first, a quick recap of what the white labeling approach entails.
What Is White-Label Banking Software, And How Does It Work?
White labeling is a procedure in which a financial services firm joins with a fintech software vendor to purchase a product and resell it under its own brand. In actuality, white-label banking refers to banking-as-a-service (BaaS), which allows fintech companies to use third-party application programming interfaces (APIs) to create their own software.
The Most Important Factors to Consider Before Deciding On White-Label Banking
When working with a white-label banking software supplier, a financial institution must customize the solution to meet industry-specific demands, make design and functionality changes, and ensure compliance with various standards.
As a result, before purchasing a software package, you should plan out a budget for implementing the essential adjustments.
On the other hand, a financial organization outlines project requirements before constructing fintech software with custom software engineering. As a consequence, you’ll get a software solution that’s perfectly aligned with your company’s objectives.
When delivering white-label finance software to banks, it’s critical to quickly deploy a wide range of customizations. White-label banking software vendors typically provide system support to discover problems and errors quickly, avoid downtime and detect security risks.
However, when serving a large number of companies, this may be challenging. It’s worth noting that some suppliers don’t provide the services listed above. There’s also the risk of not refining or abandoning a white-label solution.
When you hire a reputable custom banking software development firm, it is much easier to introduce new features and make necessary adjustments, for example, based on end-user feedback.
After launch, a software engineering firm may provide you with ongoing platform maintenance to maintain a consistent user experience and eliminate the likelihood of future issues.
Security regulations observance
Banking institutions deal with highly sensitive data such as personal information, biometric data, and payment information daily. As a result, they must comply with several regulations, including the General Data Protection Regulation (GDPR) and Payment Services Directive 2. (PSD2).
Financial institutions must identify regulations, meet, and track legal revisions to achieve this goal. As a result, fintech companies must be able to implement new security elements to comply.
White-label banking software providers can guarantee only basic requirements. Vendors may not tailor their offering to European countries if they primarily focus on US legislation, even though a portion of the audience may be EU residents. Furthermore, manufacturers may stop supporting a white-label financial platform at any time.
You should include the list of regulations in a technical specification created before the project begins when working with a reputable bespoke software engineering firm. Banking software engineers will quickly supply the required adjustments with product support after launch.
Surf prioritizes data security and compliance, incorporating features like biometrics, date encryption, role-based data access control, and two-factor authentication. Our software professionals also set up continuous system monitoring to detect suspicious activity and potential breaches in real-time and assess security concerns.
Institutions with various internal processes, technology stacks, middleware, data structures, and back-office systems, including customer relationship management and enterprise resource planning software, can use the vendor’s digital product. It is critical to ensure a fintech application’s strong integrability in this aspect.
It can be challenging to handle this issue when incorporating a white-label banking service. A white-label finance software vendor may need to implement a slew of customizations to achieve data unification and enable the seamless operation of numerous software platforms.
However, this procedure might take a long time and cost a lot of money. You will speed up software integration and lower costs in the long run by collaborating with a financial software development business.
A financial services firm that uses a white-label fintech platform must compete with firms that use the same software but are renamed. As a result, institutions must compete for the same audience, for example, by adding value or lowering prices.
By building a banking software solution from the ground up, you may develop a unique user experience and supply only the features that will solve the problems, enhancing the project’s chances of success.
When a financial institution opts for a white-label banking solution, it often obtains a product with a pre-designed look and no ability to make adjustments before making a purchase. A banking institution has complete control over the development process when working with a custom software engineering firm.
The organization may validate the outcome of each project stage by communicating with the team, ensuring that everything is progressing according to plan. As a result, you’ll have a software solution that appears and works as expected, with only the features you need.
Now explore how a financial services firm takes advantage of specialized banking solutions rather than a white labeling strategy.
How Rosbank Developed a Business-Specific Mobile App
When Rosbank approached Surf, it already had a business-oriented mobile app built on an out-of-date technology stack. As a result, the user experience was disrupted by performance concerns. Furthermore, the user interface was overly complicated. For example, to sign a document, a user had to go through a series of time-consuming steps.
Upgrading the product and adding new features was tough. Rosbank, on the other hand, did not contemplate developing a native solution for iOS and Android due to a tight budget and timelines.
The company decided not to construct white-label banking software to get the highest level of customization. Instead, Rosbank planned to build a cross-platform mobile application to save money and speed up time to market.
Surf software professionals conducted conversations with SMEs and companies to learn about their business needs and expectations to prioritize functionality. We produced a custom software product that entirely fits industry-specific needs and achieved a competitive edge due to this strategy.
Our engineers achieved reliable performance by utilizing the Flutter cross-platform framework. It’s worth noting that the app is now the world’s second Flutter-based banking app. We created an easy user experience with seamless navigation by following design principles and industry best practices.
Our team didn’t have to create two codebases for iOS and Android because of cross-platform technology, which allowed Rosbank to cut costs and time to market dramatically.
Finally, we launched a mobile banking app that allows users to manage numerous accounts, produce papers, invoices, payment orders, and convert currencies. The product was ranked #1 among mobile apps in the banking, finance, and insurance area by Tagline, Russia’s leading analytical agency.
White-label banking software has several advantages, including lower costs and faster time to market. On the other hand, trusted vendors may focus on select regions, missing local financial and government norms, yet maintaining compliance with security regulations. Banking businesses that use a white-label fintech platform must frequently customize the software to meet their needs by adding new features and changing the look. It would be best to consider the possibility that a software system’s seller will stop supporting it.
If you work with a company specializing in custom financial software development, you will receive a solution tailored to your company’s specific requirements. By avoiding competition from other companies using the same system as you, you will increase the likelihood of your project’s success. Computer programmers can use modern technologies and best practices to reduce the amount of money they spend, and the time it takes to ship new features.
Using programming languages such as Swift and Kotlin, engineers at Surf, for example, can create high-quality native applications. We also specialize in cross-platform development using frameworks such as Flutter, which can help you save money while still delivering high-quality software to your customers. Building new features every 2–3 weeks is standard practice for our banking software engineers, who follow the agile methodology.
If you are interested in developing a bespoke financial software solution, don’t hesitate to contact us at [email protected] or through our contact form. We will respond to you as quickly as possible and assist you in addressing your current difficulties.