White labels (private labeling) has long been a widespread strategy in retail, where products are made by third party manufacturers and sold under a retailer’s name. The cost to manufacture is much lower resulting in higher margins and increased revenue for sellers. China learned that early on and grew its manufacturing sector tremendously.
Possibly the biggest benefit of private labels is that they eliminate the cost and pains of having to design and build a new product or service — especially when entering a new market. By outsourcing the entire process and leaving those details to the experts, sellers can instead focus on what they excel at: branding and marketing the finished product or service.
Because the advantages of this strategy are so multidimensional, it’s no wonder private labeling is growing in service-based industries. Digital services that require technological innovation and constant updates are taking white labeling to another level. And when regulation and licensing is involved, the benefits become huge. Businesses looking to develop new offerings can now easily outsource entire technology stacks and tedious regulatory administration.
Open Financial Services Ecosystems
White label financial services are relatively new, but they are already part of the digital offerings in many markets worldwide. Regulators, who were once skeptical, are now understanding the value of white labeling. Banking as a service -BaaS is already widely discussed in the literature and a common subject in banking and fintech conferences. BaaS aims at seamlessly integrating as many service providers as needed into one comprehensive process to complete a financial service in an effective and timely manner. Many different companies who have clientele can now expand their services and operate as financial services providers using BaaS providers. In the International Money Transfer & Cross-Border Payments Industry, Remittance as a Service – RaaS has now come of age.