How to build custom digital products for Fintech and Banking Sector
21 Mar 2023 • 19 min read
The financial technology (fintech) sector is experiencing tremendous growth on a global scale, with a projected revenue of £380 billion by 2030. This growth is evidenced by the record-breaking surge in global fintech investment, which reached $98 billion in the first half of 2021, up from $87.1 billion in the second half of 2020. Such developments indicate that the industry is replete with dynamism, ingenuity, and exciting prospects. As such, stakeholders and investors are keeping a watchful eye on the fintech sector, eager to leverage the endless possibilities that this burgeoning industry has to offer.
Still, investing in a new, custom made software could be very time and money consuming. Not to mention the risks that come with project realization. It all may seem to overwhelming especially if it is the first time for your company or you have many other projects on your hands. Luckily there are solutions that will leave you satisfied and hit all the right points for you and your company.
In order to acquire cutting-edge solutions while remaining cost-effective, many financial institutions turn to white-label software development. Essentially, this involves the purchase of pre-existing software from a service provider, which is then rebranded as the purchasing institution's own. This practice of white labeling presents a straightforward solution to the issue of costly in-house software development. By outsourcing financial application development, fintech companies are able to quickly enter the market, streamline their operations, and remain competitive in an ever-evolving industry.
By the end of this article you will get a better understanding of what white-label software development is and how it can be applied to fintech industry.
What are white-labeled fintech solutions?
The main concept of white-labeling involves the legal process of rebranding and selling a product made by one company with another company's name and design. The seller produces the product with a blank label, which is then sold to the buyer who can add their own branding. This allows the buyer to enter the market quickly without investing in product development. Customers may assume that the buying company is the original creator. White labeling is especially convenient for those lacking the resources or desire to independently create products.
To translate this concept into the IT world, particularly within the financial technology sector, fintech white label refers to a partnership between a fintech software development company and a financial institution. The objective is to outsource the development of software, enabling the fintech company to obtain a finance product that meets their requirements. Responsibility for the development process rests with the third-party financial solution provider, who also licenses the right to distribute the final product. This partnership proves to be an excellent match, without needing the assistance of dating apps, as both parties complement each other's strengths.
What is a white-label platform?
White-label software refers to a platform provided by a white-label provider that is unbranded and then sold to a reseller. The reseller integrates their branding and sells access to the application as if they had developed it. Fintech companies can leverage white labelling to rebrand existing financial applications by outsourcing them from a white label provider specializing in fintech software development services. In this scenario, the selling company integrates the final product or service into their company and presents it as if they created the application themselves.
In the financial industry, banking as a service and open banking has become increasingly popular. White-label banking enables fintech companies to provide online financial services using products from white-label providers. For example, fintech companies can adopt existing APIs from a white-label provider or a bank as the foundation for selling their financial services. Rather than building a financial product from scratch, fintech companies can utilize existing applications to create their final branded financial product.
Examples of white-label digital solutions for the fintech and banking sector
To give you a better understanding of how white labelling actually works we can provide you with examples of the most popular usages in the finance area, especially in banking.
- Client onboarding:
When new client signs up for the service, they can complete an onboarding process that ensures they receive all the essential information needed to create their account.
- Issuance of virtual cards:
With the licenses and regulations provided by white label banking solutions, it becomes much simpler to start issuing virtual cards in online banks.
- Bill payments and currency exchange:
A digital bank's instant payment network is one of its most valuable features. Your clients will have access to various currencies, payment and exchange methods, loans, sublicensing, and more.
- Withdrawals and deposits:
Convenience, speed, and lack of bureaucracy are some of the reasons people choose the digital banking experience. Thanks to a white-label digital bank provider, your customers will be able to make deposits and withdrawals more easily.
Whether you need to offer users a mortgage calculator or an online mortgage application form, a customized fintech white label software can assist you in providing functional digital mortgage software that is easy for users to navigate.
- Bank statements with transaction details:
Users have the ability to view their bank statements, which include transaction details such as withdrawals, deposits, and charges, as well as balance details for a specific period.
- Balance notifications:
To prevent overspending, users can request notification alerts for their bank balances.
How to make a successful white-label fintech solution?
Once you see that this solution is highly functional and profitable you may wonder what are the steps to build a successful white label. Drawing from the enterprises that succeeded in delivering great white-label solutions.
Here are absolute must-haves when developing your project:
To get the best results and maximise your white-label app ensure that the team of developers creates it in a way that you can personalize it to your liking and needs. This can prevent your dissatisfaction and ease further process changes. Each part of it should be easy to alternate.
To create a successful app, both for custom software and for a white label, you need to decide on features that will best suit your project. Choose them considering many influential factors such as your target audience, product niche and customers' needs. Be sure to implement them into the latest technologies on the market!
Your branding will be the factor that brings your white-label app to stand out. Be sure to stick to your brand image and design so that the app will be easy to distinguish from the competitors.
- Development costs:
Creating a cost plan for your project is always a crucial step that influences the whole process. Luckily unlike custom software development, white-label solutions have mostly set features therefore estimation of their cost is easier and faster.
- APIs and integration:
To smooth the work and prevent most of the changes and unnecessary stops be sure to create a list of important integrations before. Based on your main gaol you can then incorporate them into the right places.
The safety of your app and its use is first in the line in each software development process. Not to mention the importance of in the fintech industry. Try to investigate all the risks and possible security solutions and search for the best prices on the market.
Better to be safe than sorry. Your team is able to create a support system to fix any problems in the future. You should also be provided with all the information on how to repair the basic complication for the admin’s position.
- Reselling complexities:
Take time to discuss the rights and royalties of your app with its developers. Find the option that fits you and your budget choosing between purchasing the software or buying its subscription.
It's important to establish a definite strategy for licensing and selling the software, such as hiring a company to handle sales on a commission or compensation basis.
It's important to establish a clear pricing system for your product or service, taking into account market trends and competitors. You should balance your income expectations with your users' ability to pay, and make sure your pricing policy aligns with the market standard.
As a reliable white label provider, it's essential that you:
- Provide a product that meets your partner's specific needs.
- Take an innovative approach to enhance your partner's product.
- Establish reliable systems and methods to build a good reputation and trading history.
- Offer dependable support to help your partner troubleshoot issues.
- Provide a transparent agreement with a minimum lock-in timeline and standard fees.
- Create a demo version of your app to give potential partners a chance to try it out before making a purchase and see how it would work for their business.
Apart from thoes points you should also consider:
Good marketing helps you reach and connect with your target audience effectively. It can help build brand recognition and increase customer loyalty. It can also help differentiate your product from competitors and highlight your unique value proposition.
- Pricing Strategy:
A well-planned pricing strategy can help maximize profits while still remaining competitive. It can also help attract and retain customers by offering value for their money. It's important to consider market trends and your target audience's willingness to pay when developing a pricing strategy.
- Product Strategy:
A strong product strategy helps ensure that the app meets the needs and preferences of your target audience.It can help identify potential roadblocks or areas for improvement early on in the development process. A well-executed product strategy can help drive user adoption and satisfaction.
- Building an MVP:
An MVP (minimum viable product) allows you to test your product concept and get user feedback before investing significant time and resources.
It can help you identify key features and functionality that are most important to your target audience. Building an MVP first can help minimize the risk of developing a product that doesn't meet user needs or lacks market demand.
How to hire a fintech developer?
The last step before starting your project is to hire a team of developers and find the solution that fits your business. There are three main categories when gathering people to work on your app.
In-house development team
Having an in-house development team involves hiring fintech developers who work from your office on a daily basis. These employees tend to be highly motivated and engaged in your project's long-term goals.
Advantages of hiring in-house fintech developers:
- You have complete control over your employees and development costs, enabling you to manage each task and the entire development process.
- In-house developers quickly assimilate your company's values and project scope, with faster onboarding and opportunities for knowledge exchange among team members.
- There are no time zone differences, making communication easy, and personal interaction allows for quick resolution of issues.
- In-house developers are highly dedicated, working only on your project.
Disadvantages of hiring in-house fintech developers:
- It can be a costly approach, requiring a budget for recruitment, salaries, accounting, equipment, and other administrative activities.
- Your search is limited to a particular geographic location, making it difficult to find a local specialist with the specific skills and experience you need.
Where to find in-house fintech developers? You can use job platforms, social networking sites, and other channels where developers post their CVs. Professional job websites like LinkedIn, Glassdoor, CareerBuilder, and GitHub Jobs are popular options. If you're wondering when to hire an in-house fintech app developer, consider the key signs that this option is the right choice for you.
Hiring a freelancer:
When it comes to finding fintech specialists, another popular option is hiring freelancers. Freelancers are cheaper than in-house employees and offer the opportunity to work with developers from around the world. However, there are pros and cons to consider. Let's take a closer look at them.
Pros of hiring a fintech freelancer:
- It's a cost-effective option since you only pay for hours worked, without having to manage vacations, equipment, or sick leaves.
- You have access to a wide variety of fintech developers with diverse knowledge and experience from all over the world, giving you every chance of finding the right specialist.
Cons of hiring a fintech freelancer:
- There may be management issues due to time zone differences and a lack of personal interaction, which can make it hard to control the time spent on tasks and lead to delays.
- Freelancers are often less engaged and motivated than in-house employees, meaning they may focus on specific tasks rather than the project's overall success.
- There is a risk of overestimated or false skills, so it's important to thoroughly check CVs and credentials to avoid hiring someone who can't meet your needs.
To find a freelance fintech developer, trusted websites such as Upwork, Fiverr, Freelancer, and Toptal can be used. These platforms provide employee profiles, search features, and reviews from past clients.
Outsourcing a development team:
This alternative involves outsourcing and appointing a dedicated development team to oversee your project development process. With this option, you won't have to handle administrative activities as your development team will manage everything.
Benefits of partnering with a dedicated fintech development team:
- This approach offers significant flexibility and scalability. If your project grows and requires more specialists, the dedicated team can provide them.
- You won't have to worry about managing the process. A professional dedicated development team knows how to create efficient workflows to deliver high-quality products. Additionally, your outsourcing company will assign a project manager to oversee the development process and report directly to you on the project's progress.
- A dedicated team possesses deep technical expertise. Because of the rapid development of technology, the emergence of new opportunities, and high competition in the market, they tend to use proven and up-to-date technologies.
- A dedicated team is more than a development partner. Typically, such a team can assist you at every stage of product development, from validating your business idea to launching it.
Disadvantages of partnering with a dedicated fintech development team:
- This approach can be costly if you have a small amount of work to be done.
- Due to the team's location in a country with a significant time difference, you may encounter communication issues. Or, misunderstandings may occur if the team has limited knowledge of your language.
Where to find a dedicated fintech team:
The most popular approach to finding a dedicated development team is to use reliable platforms like Clutch, IT Firms, GoodFirms, or TopDevelopers, where IT vendors post information about their services. On these platforms, you can view the development company's technology stack, rates, reviews, and other relevant details, making it easier to find your ideal technology partner.
Before choosing a dedicated development team, ensure that this is the right approach for you. To get a better understanding be sure to read our post on Everything You Need to Know About Outsourcing Software Development.
If you are still unsure about which of these options best suits your company you should also check out our ultimate guide on the In-house Software Development Team vs IT outsourcing: Pros & Cons.
Fintech is gaining its market share and becoming more profitable each year. If you think of developing your project in this area there are a few solutions for you. One of them is having white-label software and customising it for yourself. This solution can lower your costs and speed up the process. As with everything it has its disadvantages and advantages, and you should carefully think your decision through.
Be sure to include all the important steps when planning your project as well as choosing the right development team solution. Consider all the factors that go into this arrangement and how it will influence your company and its future.
It all may seem a bit overwhelming, therefore you can always turn for help to the experts. SolveQ has a lot of experience in software development and is happy to help you. Be sure to contact us and develope your fintech software.
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