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White Label Concepts in the Market for Innovative Financial Services

Key Facts

  • Increasing numbers of white label products in the market for innovative financial services

  • Maturity level of developments increasing along with the specialization of products

  • Standardization and brand differentiation through white labelling

  • Integration of innovations in more comprehensive value-added chains

  • Potential for combining standards with differentiated brand strategy



Increasing numbers of white label concepts are to be found in the market for innovative financial services. This is first of all a sign of the rising level of maturity of the developments in terms of the convergence of traditional and innovative banking products. Above and beyond that, this creates opportunities for established banking service providers to integrate innovations straightforward into their product portfolio; but that requires a differentiated brand strategy.


Figure: Conceptual view of label vs. white label production

White labelling is a technique that is particularly prevalent in the consumer goods industry: Instead of being distributed under a single label, products are distributed under a “white label“. This allows other providers to sell products produced by non-affiliated companies under their own brand (Fig.)

The concept of white labelling is therefore related, on the one hand, to standardized industrial production processes, and, on the other hand, to marketing and distribution methods based on specific brands. This enables companies in the food industry, for example, to sell off excess products, to use their full production capacity, or to develop house brands into an independent market presence, known as “private label” approaches. In other markets formerly organized as monopolies or oligopolies, such as the energy sector, deregulation is another factor in the mix. Without investing in building up production or in regulation expertise, players new to the industry can place white label products on the market in connection with their own brand via distribution networks. The strategy behind this is to access new markets and customers while minimizing investement costs and simultaneously optimizing the capacity of the distribution network.

Spurred by recent innovative developments, white label concepts have recently begun to enter the market for financial services as well. Although these concepts target different services in the individual segments, in general they are significant for the market:

  • In the Asset Management segment, “Rolotec“ and “Teletrader“ concentrate on aggregating stock market information; “Admiral Markets” provides a trading platform for the Forex trade and for trading with CFDs; the “FXdirekt Bank”-at the moment heavily criticized-offers a trading platform and provides various service levels.

  • In the field of Lending Operations, “startnext” offers its crowd-funding platform as a white label solution; “Hypoport” provides with “EUROPACE” an information platform for loans that is used by “AWD” for example..

  • In the Personal Finance Management segment, “Meniga“ and “Strands Finance“ are services implemented by established institutes.

  • The white label product palette is most extensive in the field of Payment Transactions. “Wirecard” provides a mobile card reader and a mobile wallet; “BOKU” also offers a wallet; “TrustCash” and “SQWALLET” provide different online checkout methods. “LevelUp” offers its mobile payment app to businesses that want to either build oder extend their app with a payment function. The “Bancorp Bank” provides a type of white label solution for a complete online banking service, such as the one realized by “Simple”.

In the first instance, the white labelling of products indicates a higher level of maturity of innovative developments. These no longer act as brand-building services, but provide the option of being combined with additional services. This higher level of maturity also reflects the fact that many of the solutions realize a special functionality, particularly in the field of technological innovation. This functionality relies on a more comprehensive ecosystem that cannot be produced by the providers themselves. The value creation is dependent on the implementation of the function in a more extensive value-added chain.

It is at this point that established banks can begin to integrate the products and services. The disadvantage of this process lies in the fact that actors cannot use it to create a unique functionality distinct from those offered by competitors. On the other hand, the advantage lies in implementing a product without increasing the level of vertical production, and using the provider’s own distribution network for market presence.

In order to make use of this potential, actors must combine the integration of the products with a differentiated branding strategy that may also require a higher degree of brand diversification. This requires taking the target group into consideration and thinking about factors such as an image separate from that of the bank or the brand-specific linking of a standard product with additional services.

White label concepts open up various opportunities on the market for established financial services providers to integrate innovations. The more attackers begin to act based on a changed self-understanding and to develop their concepts not as counter-designs but as complements to traditional banking services, the more opportunities for cooperation arise with high synergy potential.