White-label neobanks are the future of banking, providing digitized and customized financial services with an agility that traditional financial institutions simply cannot offer.
The concept of a digital bank, or digital banking platform, has been around for the better part of a decade, with such institutions providing services like creating and operating savings accounts, loan payments
Payments
One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonly the basis of exchange involves fiat currency or legal tender, be it in the form of cash, credit or bank transfers, debit, or checks. While typically associated with cash transfers, payments can also be made in anything of perceived value, be it stock or bartering – though this is far more limited today than it has been in the past.The Largest Players in the Payments IndustryFor most individuals, the payments industry is dominated currently by card companies such as Visa or Mastercard, which facilitate the use of credit or debit expenditures. More recently, this industry has seen the rise of Peer-to-Peer (P2P) payments services, which have gained tremendous traction in Europe, the United States, and Asia, among other continents.One of the biggest parameters for payments is timing, which looms as a crucial element for execution. By this metric, consumer demand incentivizes technology that prioritizes the fastest payment execution.This can help explain the preference for debit and credit payments overtaking check or money orders, which in previous decades were much more commonly utilized. A multi-billion-dollar industry, the payments space has seen some of the most innovation and advances in recent years as companies look to push contactless technology with faster execution times.
One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonly the basis of exchange involves fiat currency or legal tender, be it in the form of cash, credit or bank transfers, debit, or checks. While typically associated with cash transfers, payments can also be made in anything of perceived value, be it stock or bartering – though this is far more limited today than it has been in the past.The Largest Players in the Payments IndustryFor most individuals, the payments industry is dominated currently by card companies such as Visa or Mastercard, which facilitate the use of credit or debit expenditures. More recently, this industry has seen the rise of Peer-to-Peer (P2P) payments services, which have gained tremendous traction in Europe, the United States, and Asia, among other continents.One of the biggest parameters for payments is timing, which looms as a crucial element for execution. By this metric, consumer demand incentivizes technology that prioritizes the fastest payment execution.This can help explain the preference for debit and credit payments overtaking check or money orders, which in previous decades were much more commonly utilized. A multi-billion-dollar industry, the payments space has seen some of the most innovation and advances in recent years as companies look to push contactless technology with faster execution times.
Read this Term, money transfers and multicurrency accounts to manage foreign exchange transactions. By operating without physical branches, thus reducing operational costs, neobanks are a smart alternative for traditional financial institutions, large enterprises and capital-infused startups to consider when expanding their community outreach.
The white-label neobank market keeps expanding, with a projected market size of close to $2.05 trillion by 2030 with more than 53% CAGR. It’s a solution that younger generations like Gen Z and millennials especially prefer. So, how can your business successfully create a white-label neobank and reap its many benefits?
Understanding the Neobank Landscape to Create a White-Label Neobank
The neobanking landscape combines a series of non-licensed and licensed neobanks and digital initiatives of traditional financial institutions.
Licensed digital banking platforms obtain fully operational banking licenses, allowing them to offer services traditional institutions can’t. Through such decentralized means, neobanks reduce their costs and improve their profitability while optimizing their core banking platforms, enabling smooth integration with any external service providers that they partner with. Meanwhile, non-licensed neobanks, also called over-the-top banking platforms, act as marketplaces for various financial products and use APIs to connect customers to services offered by different financial players.
Obtaining a License or Forming a Partnership
To set up a digital banking platform, you could opt for acquiring a virtual banking license from government officials, then start full-fledged banking services on a mobile app or through digital touchpoints without using physical branches. Neobanks across Europe have taken this route although a lack of clarity surrounding virtual banking policies has forced them to adapt.
The best alternative is to partner with traditional financial institutions to offer customer relationship services – a smart move considering neobanks pride themselves on providing unique customer experiences for all they serve. A white-label neobank provides the kind of transactional and onboarding agility customers demand with customizable tools and interfaces to make banking experiences seamless.
By setting up a neobank in conjunction with a traditional financial institution, you get around the loopholes of existing banking infrastructures. Also, neobanks enhance the augmentation of distribution networks for traditional banks while helping them save research costs.
The Challenges of Setting Up a Neobank
When setting up a white-label neobank, or digital banking platform, you must address business, technology and compliance challenges for your solution to last.
The Business Challenges
Some of the biggest challenges with setting up a white-label neobank are:
- Getting the right technical solution,
- Licensing,
- Customer support,
- Go-to-market strategies,
- Customer segmentation and targeting the right segments,
- Creating the right product-market fit for addressable segments,
- Decision-making regarding partnerships with traditional financial institutions,
- Adapting to regulatory requirements within the affiliated region.
Scaling up for different segments and regions can be challenging during the growth stage for a white-label neobank if there’s no advanced plan. Intense research of the economy within the targeted region and customer segment is necessary to understand which customer bases you should prioritize servicing depending on their needs. With sound research, you can then establish a strong marketing
Marketing
Marketing is defined as the business process of identifying, anticipating and satisfying customers’ needs and wants.This is a crucial element of any operation or brokerage in the financial services space. Well-funded marketing campaigns are instrumental to the survival and longevity of these companies in an increasingly competitive industry.Within the forex space, marketers perform a wide range of functions to help procure, secure, or retain clients.In particular, newer forex brokers also have to handle the acquisition of traders, retaining them for a longer period of time or distinguishing between brokerage and competitors.What Are the Most Common Marketing Strategies Used by FX Brokers?This process can take shape in a variety of forms. Advertising is the most commonly deployed technique for forex marketing.This includes a marketing plan that touches on digital and traditional advertising. Advertising can include banner ads, notifications, newsletters, or other mechanisms for drawing attention to any brand or brokerage.Blog posting or other forms of search engine optimization (SEO) are also effective marketing tools for forex brokers.Well-organized and attractive pieces of content on websites are very useful for users and clients and have proven to be successful marketing strategies.Such efforts also enable websites to be found by those looking for what a broker offers and those who are looking for some knowledge about the trading industry. This can also help generate traffic on landing pages, converting sales. Social media has also rapidly evolved as a critical element of marketing.Forex brokers rely on social media such as Twitter, Facebook, or Linkedin for marketing needs, capable of reaching a huge audience. Ultimately marketing requires efforts on part of brokers to bridge the gap with their desired audience. In this instance, this means potential clients or existing ones.
Marketing is defined as the business process of identifying, anticipating and satisfying customers’ needs and wants.This is a crucial element of any operation or brokerage in the financial services space. Well-funded marketing campaigns are instrumental to the survival and longevity of these companies in an increasingly competitive industry.Within the forex space, marketers perform a wide range of functions to help procure, secure, or retain clients.In particular, newer forex brokers also have to handle the acquisition of traders, retaining them for a longer period of time or distinguishing between brokerage and competitors.What Are the Most Common Marketing Strategies Used by FX Brokers?This process can take shape in a variety of forms. Advertising is the most commonly deployed technique for forex marketing.This includes a marketing plan that touches on digital and traditional advertising. Advertising can include banner ads, notifications, newsletters, or other mechanisms for drawing attention to any brand or brokerage.Blog posting or other forms of search engine optimization (SEO) are also effective marketing tools for forex brokers.Well-organized and attractive pieces of content on websites are very useful for users and clients and have proven to be successful marketing strategies.Such efforts also enable websites to be found by those looking for what a broker offers and those who are looking for some knowledge about the trading industry. This can also help generate traffic on landing pages, converting sales. Social media has also rapidly evolved as a critical element of marketing.Forex brokers rely on social media such as Twitter, Facebook, or Linkedin for marketing needs, capable of reaching a huge audience. Ultimately marketing requires efforts on part of brokers to bridge the gap with their desired audience. In this instance, this means potential clients or existing ones.
Read this Term strategy that properly targets underserved segments and personalizes digital banking services for them to use regularly.
The Technological Challenges
When a new white-label digital bank tries to gain market positioning by partnering with traditional financial institutions or going for licenses, you must explore all technological limitations.
Emerging digital banking platforms must explore the partner institution’s banking and digital API capabilities before entering into a partnership. Many core banking systems for traditional institutions don’t meet modern standards, with these systems having to undergo cycles of changes before meeting enhanced industry standards. Addressing technical debts, skill gaps and improving knowledge transfer are among the obstacles institutions must overcome to provide improved core banking solutions to customers. With a white-label neobank providing customer-centric technology-driven solutions, partnerships with traditional institutions require experienced teams, robust software and faster processes to realize the many benefits a neobank offers.
Regulatory/Compliance Challenges
The better data security is, the easier it is for customers to trust the solution you’re providing. Regulatory compliance and security infrastructure are vital for a white-label neobank solution to prosper, considering that customer data and financial products are at the crux of its services.
You need to be in an environment that allows neobanks to operate without the burden of tight restrictions. For example, countries like China aim to be leaders in regulatory compliance initiatives as they increase neobank adoption.
Then, there are other management issues such as PCI DSS compliance, the creation/issuance of payment tokens and creating security tools to protect customer data. Ensuring that you maintain access logs to inspect your neobank platform’s security is a best practice. Also, you should run a series of checks to identify and quarantine security issues before deploying a white-label digital banking solution.
Creating a white-label neobank has never been easier as the many benefits and services it provides can be leveraged to add much-needed nuance and flexibility to the traditional financial sector.
White-label neobanks are the future of banking, providing digitized and customized financial services with an agility that traditional financial institutions simply cannot offer.
The concept of a digital bank, or digital banking platform, has been around for the better part of a decade, with such institutions providing services like creating and operating savings accounts, loan payments
Payments
One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonly the basis of exchange involves fiat currency or legal tender, be it in the form of cash, credit or bank transfers, debit, or checks. While typically associated with cash transfers, payments can also be made in anything of perceived value, be it stock or bartering – though this is far more limited today than it has been in the past.The Largest Players in the Payments IndustryFor most individuals, the payments industry is dominated currently by card companies such as Visa or Mastercard, which facilitate the use of credit or debit expenditures. More recently, this industry has seen the rise of Peer-to-Peer (P2P) payments services, which have gained tremendous traction in Europe, the United States, and Asia, among other continents.One of the biggest parameters for payments is timing, which looms as a crucial element for execution. By this metric, consumer demand incentivizes technology that prioritizes the fastest payment execution.This can help explain the preference for debit and credit payments overtaking check or money orders, which in previous decades were much more commonly utilized. A multi-billion-dollar industry, the payments space has seen some of the most innovation and advances in recent years as companies look to push contactless technology with faster execution times.
One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonly the basis of exchange involves fiat currency or legal tender, be it in the form of cash, credit or bank transfers, debit, or checks. While typically associated with cash transfers, payments can also be made in anything of perceived value, be it stock or bartering – though this is far more limited today than it has been in the past.The Largest Players in the Payments IndustryFor most individuals, the payments industry is dominated currently by card companies such as Visa or Mastercard, which facilitate the use of credit or debit expenditures. More recently, this industry has seen the rise of Peer-to-Peer (P2P) payments services, which have gained tremendous traction in Europe, the United States, and Asia, among other continents.One of the biggest parameters for payments is timing, which looms as a crucial element for execution. By this metric, consumer demand incentivizes technology that prioritizes the fastest payment execution.This can help explain the preference for debit and credit payments overtaking check or money orders, which in previous decades were much more commonly utilized. A multi-billion-dollar industry, the payments space has seen some of the most innovation and advances in recent years as companies look to push contactless technology with faster execution times.
Read this Term, money transfers and multicurrency accounts to manage foreign exchange transactions. By operating without physical branches, thus reducing operational costs, neobanks are a smart alternative for traditional financial institutions, large enterprises and capital-infused startups to consider when expanding their community outreach.
The white-label neobank market keeps expanding, with a projected market size of close to $2.05 trillion by 2030 with more than 53% CAGR. It’s a solution that younger generations like Gen Z and millennials especially prefer. So, how can your business successfully create a white-label neobank and reap its many benefits?
Understanding the Neobank Landscape to Create a White-Label Neobank
The neobanking landscape combines a series of non-licensed and licensed neobanks and digital initiatives of traditional financial institutions.
Licensed digital banking platforms obtain fully operational banking licenses, allowing them to offer services traditional institutions can’t. Through such decentralized means, neobanks reduce their costs and improve their profitability while optimizing their core banking platforms, enabling smooth integration with any external service providers that they partner with. Meanwhile, non-licensed neobanks, also called over-the-top banking platforms, act as marketplaces for various financial products and use APIs to connect customers to services offered by different financial players.
Obtaining a License or Forming a Partnership
To set up a digital banking platform, you could opt for acquiring a virtual banking license from government officials, then start full-fledged banking services on a mobile app or through digital touchpoints without using physical branches. Neobanks across Europe have taken this route although a lack of clarity surrounding virtual banking policies has forced them to adapt.
The best alternative is to partner with traditional financial institutions to offer customer relationship services – a smart move considering neobanks pride themselves on providing unique customer experiences for all they serve. A white-label neobank provides the kind of transactional and onboarding agility customers demand with customizable tools and interfaces to make banking experiences seamless.
By setting up a neobank in conjunction with a traditional financial institution, you get around the loopholes of existing banking infrastructures. Also, neobanks enhance the augmentation of distribution networks for traditional banks while helping them save research costs.
The Challenges of Setting Up a Neobank
When setting up a white-label neobank, or digital banking platform, you must address business, technology and compliance challenges for your solution to last.
The Business Challenges
Some of the biggest challenges with setting up a white-label neobank are:
- Getting the right technical solution,
- Licensing,
- Customer support,
- Go-to-market strategies,
- Customer segmentation and targeting the right segments,
- Creating the right product-market fit for addressable segments,
- Decision-making regarding partnerships with traditional financial institutions,
- Adapting to regulatory requirements within the affiliated region.
Scaling up for different segments and regions can be challenging during the growth stage for a white-label neobank if there’s no advanced plan. Intense research of the economy within the targeted region and customer segment is necessary to understand which customer bases you should prioritize servicing depending on their needs. With sound research, you can then establish a strong marketing
Marketing
Marketing is defined as the business process of identifying, anticipating and satisfying customers’ needs and wants.This is a crucial element of any operation or brokerage in the financial services space. Well-funded marketing campaigns are instrumental to the survival and longevity of these companies in an increasingly competitive industry.Within the forex space, marketers perform a wide range of functions to help procure, secure, or retain clients.In particular, newer forex brokers also have to handle the acquisition of traders, retaining them for a longer period of time or distinguishing between brokerage and competitors.What Are the Most Common Marketing Strategies Used by FX Brokers?This process can take shape in a variety of forms. Advertising is the most commonly deployed technique for forex marketing.This includes a marketing plan that touches on digital and traditional advertising. Advertising can include banner ads, notifications, newsletters, or other mechanisms for drawing attention to any brand or brokerage.Blog posting or other forms of search engine optimization (SEO) are also effective marketing tools for forex brokers.Well-organized and attractive pieces of content on websites are very useful for users and clients and have proven to be successful marketing strategies.Such efforts also enable websites to be found by those looking for what a broker offers and those who are looking for some knowledge about the trading industry. This can also help generate traffic on landing pages, converting sales. Social media has also rapidly evolved as a critical element of marketing.Forex brokers rely on social media such as Twitter, Facebook, or Linkedin for marketing needs, capable of reaching a huge audience. Ultimately marketing requires efforts on part of brokers to bridge the gap with their desired audience. In this instance, this means potential clients or existing ones.
Marketing is defined as the business process of identifying, anticipating and satisfying customers’ needs and wants.This is a crucial element of any operation or brokerage in the financial services space. Well-funded marketing campaigns are instrumental to the survival and longevity of these companies in an increasingly competitive industry.Within the forex space, marketers perform a wide range of functions to help procure, secure, or retain clients.In particular, newer forex brokers also have to handle the acquisition of traders, retaining them for a longer period of time or distinguishing between brokerage and competitors.What Are the Most Common Marketing Strategies Used by FX Brokers?This process can take shape in a variety of forms. Advertising is the most commonly deployed technique for forex marketing.This includes a marketing plan that touches on digital and traditional advertising. Advertising can include banner ads, notifications, newsletters, or other mechanisms for drawing attention to any brand or brokerage.Blog posting or other forms of search engine optimization (SEO) are also effective marketing tools for forex brokers.Well-organized and attractive pieces of content on websites are very useful for users and clients and have proven to be successful marketing strategies.Such efforts also enable websites to be found by those looking for what a broker offers and those who are looking for some knowledge about the trading industry. This can also help generate traffic on landing pages, converting sales. Social media has also rapidly evolved as a critical element of marketing.Forex brokers rely on social media such as Twitter, Facebook, or Linkedin for marketing needs, capable of reaching a huge audience. Ultimately marketing requires efforts on part of brokers to bridge the gap with their desired audience. In this instance, this means potential clients or existing ones.
Read this Term strategy that properly targets underserved segments and personalizes digital banking services for them to use regularly.
The Technological Challenges
When a new white-label digital bank tries to gain market positioning by partnering with traditional financial institutions or going for licenses, you must explore all technological limitations.
Emerging digital banking platforms must explore the partner institution’s banking and digital API capabilities before entering into a partnership. Many core banking systems for traditional institutions don’t meet modern standards, with these systems having to undergo cycles of changes before meeting enhanced industry standards. Addressing technical debts, skill gaps and improving knowledge transfer are among the obstacles institutions must overcome to provide improved core banking solutions to customers. With a white-label neobank providing customer-centric technology-driven solutions, partnerships with traditional institutions require experienced teams, robust software and faster processes to realize the many benefits a neobank offers.
Regulatory/Compliance Challenges
The better data security is, the easier it is for customers to trust the solution you’re providing. Regulatory compliance and security infrastructure are vital for a white-label neobank solution to prosper, considering that customer data and financial products are at the crux of its services.
You need to be in an environment that allows neobanks to operate without the burden of tight restrictions. For example, countries like China aim to be leaders in regulatory compliance initiatives as they increase neobank adoption.
Then, there are other management issues such as PCI DSS compliance, the creation/issuance of payment tokens and creating security tools to protect customer data. Ensuring that you maintain access logs to inspect your neobank platform’s security is a best practice. Also, you should run a series of checks to identify and quarantine security issues before deploying a white-label digital banking solution.
Creating a white-label neobank has never been easier as the many benefits and services it provides can be leveraged to add much-needed nuance and flexibility to the traditional financial sector.
Source: https://www.financemagnates.com/fintech/how-to-create-a-neobank-or-digital-bank/