Suddenly, fintechs are swamped with demand for white-label solutions

‘White-label’ products enable broad range of companies to offer financial services
Volt Bank partners with Microsoft to create ‘banking as a service’ platform
‘We’ve got more deposits than we know what to do with’

White is the new black when it comes to financial technology companies.

Startups are increasingly enabling companies to offer financial services under their own brand, rather than the startup’s brand, a process known as white labeling.

The term comes from the retail space, when a supplier offers retailers products with a “white label” where they can write in their own brand.

Volt Bank on Tuesday announced it was pivoting to offering more white-label solutions, partnering with Microsoft and LAB3 to create a next-generation “banking as a service” platform that allows white-label banking.

Founder and chief executive Steve Weston told Stockhead the neobank had always planned to offer white-label banking solutions but figured it would be maybe around one per cent of its business.

But it’s now clear that white-label banking will make up the lion’s share of Volt’s business, Weston said.

“We have been overwhelmed with the level of demand from corporations to do that,” he said.

Under Volt’s new platform, financial advisors and cryptocurrency exchanges, for example, could leverage Volt’s technology and banking license to store client funds and more easily move cash at a better interest rate, Weston said.

It’s a strategy that sets Volt apart from other neobanks, he said. The platform – which uses Microsoft’s Azure cloud platform and enterprise banking software from Switzerland-based Temenos AG – could even be used by incumbent banks to overcome the limitations of their legacy banking systems, according to Volt.

Volt Bank is still in beta status ahead of its public launch pending.

“We’ve got more deposits than we know what to do with,” Weston said.

“The deposits are actually on deposit at other banks, until Volt is able its own mortgage and loan program.”

White label BNPL

Limepay is another fintech offering white label solutions, this time for merchants seeking to offer installment payment plans.

Founder and chief executive Tim Dwyer told Stockhead recently that its offering enables merchants to control their own branding, rather than redirecting consumers to a third-party site.

While Afterpay (ASX:APT) and Klarna have successfully advertised a platform that resonates with the millennial female demographic, Dwyer said that it excludes other groups.

“The marketing doesn’t talk to me, or my friends, or my peers,” Dwyer said.

“It’s something that none of the others have shown much love to, because they’re not marketing to those people.”

Other companies creating white label solutions include Auckland-based 9Spokes (ASX:9SP), which counts Bank of America and Bank of New Zealand among its clients, and Ensurance (ASX:ENA), which offers white-label insurance products.