In this economy, the overall development of companies involved in FinTech services often comes down to time-to-market factors and the cost-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 to expand your services and reduce the overall workload of your employees.

Why will you, then, invest in a white-label FintTech platform? 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 chance at positively disrupting your activity sector, the product you launch must quickly capitalize on the technological developments happening in the digital investment space.

Private-label platforms already benefit from the necessary technological infrastructure to accelerate the deployment process of your digital services and are also significantly more cost-effective than maintaining your portal’s infrastructure in-house with the help of a separate team. Scaling a digital, white-label FinTech platform is no easy business, as the operations necessary to expand your services will typically require upfront and operational costs that are unmanageable by most enterprises active in the US. Sure, it can be done, and it’s an option preferred by some companies. But, it’s not a wise choice if cost-savings are a priority.

Is That All?

No, not by a long shot. The FaaS sector is predicted to grow at an accelerated pace in the next couple of years and reach a market size that will probably surpass $1.35 trillion. White-label services, whether we are talking about digital platforms for FinTechs or other industries, are all the rage right now, as most companies are faced with significant staff shortages and are having difficulties in managing the back-end elements of their websites or digital platforms internally.

Private-label platforms are efficient in accelerating the development time of your financial services, necessitate lower maintenance costs than internally developed investment portals, and are a solution to consider if you lack the in-house expertise to create a FinTech solution with minimal external funding. Sure, your teams might be experienced in creating digital banking services for niche audiences. But this doesn’t mean they benefit from the technical prowess to develop your enterprise’s platform from scratch.

White-label FinTech platforms can allow your staff to concentrate on their core competencies, test new niche products before they are ready for mass release, and help your senior management find partnership opportunities with financial platforms that share your goals and aspirations. TL; DR: Private-label platforms are simply a more advantageous choice and can provide FinTechs with the technological foundation necessary to cause positive disruption in target sectors.

A Fantastic Way to Diversify Your Revenue Streams

Demand for white-label FinTech solutions is primarily led by competitive pressure. Private-label FinTech companies offer highly customizable digital solutions that are already compatible with the CRMs and accounting applications used by the vast majority of non-banking financial companies. Truth is, both NBCs and conventional banking institutions are looking to expand on the services provided to customers and offer customizable portfolio management tools that can integrate multiple investment classes.

But, there’s an issue: Technological expansion is time-consuming and can severely limit the existing services provided to customers. Private-label platforms eliminate these issues, as the technological resources 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 broad spectrum of financial services that, when combined, could create multiple revenue streams for their brand.

Sure, a professionally created white-label FinTech platform will not be exactly cheap, as most such platforms work on subscription-based models, whose prices will be influenced by the customization you require on the portal and the costs for maintaining the platform’s infrastructure optimized for visitors. However, by and large, white-label models are significantly cheaper than internally-developed ones.

Let’s Talk Numbers

For the sake of this argument, let’s assume you are a mid-sized FinTech company, and you are looking to expand on the services provided to customers and launch a digital wallet platform developed internally by a team of highly skilled IT technicians. Likewise, let’s assume you are targeting around 100,000 users in the first year of operations and that you are planning to launch the portal in less than 12 months.

Finding highly skilled technicians for this project can be challenging and most definitely not cheap. For such an aggressive timeline, you will probably require at least five full-time developers, two or three quality assurance officers, one product manager, and at least one compliance officer. None of these jobs come cheap. So, only the salaries of the development team will probably cost you more than $1 million per year.

On top of that, you will also have to consider the cost associated with the platform’s cloud hosting and the ongoing maintenance and updates required to keep the platform usable and competitive with rival services. All in all, the cost of launching the aforementioned digital wallet platform could be anywhere between $1-$1.5 million and require a couple of hundred thousand per year in maintenance costs alone. But that’s option A.

In the End, It’s All About the Money

Option B is to utilize a white-label FinTech platform that already benefits from the infrastructure required to expand your services and launch your digital products. Let’s say the portal already comes bundled with the functionality you require. In that case, you will probably only need to invest in UI/UX modifications and pay the one-time setup fee demanded by the platform’s provider, as well as a monthly subscription.

It will not exactly be cheap, as subscriptions for a large-scale private-label platform can, in some cases, cost more than $10,000 per year. That said, when it’s all said and done, the yearly costs of an outsourced white-label Fintech portal will be around $150-$200k, while internally developed ones will cost, most likely, more than a million.

Private-label platforms require less direct involvement from your employees, involve less operational costs, and are easily customizable, which is a significant advantage, as your brand’s image will need to seamlessly integrate with the platform’s core functionalities. Plus, white-label FinTech platforms benefit from regular updates that can patch up any security holes discovered during internal back-end audits and come pre-built with compliance monitor tools that eliminate the risks of your services failing to adhere to regulatory practices. For most FinTech, they are simply a better deal, and that’s why their adoption has become commonplace in the digital medium.