What are the essential components of a White Label service?
Jake Smithis Associate Director for e-Commerce at HSBC Bank plc
The requirements of both the client bank and those of the end-user
are crucial to consider says Jake Smith. He shows the importance of
building a range of functionality, which can be split into elements
within the trade cycle.
When looking at white labelling any organisation can suggest a
complete shopping list of potential requirements and build these
into an offering, but it is the customer's (in this case a client
bank's) opinion that dictates what is essential to them. From
discussions with a large number of banks it has become apparent
that whilst both technology and the provision of liquidity are
important, they perhaps are only the basics of the overall
offering. The commitment on both sides to a long-term business
relationship is the essential component that differentiates bank
What further complicates the process is that the relationship is
not simply between two banks. Two sets of requirements must be
considered those of the client bank and those of the end-user. As
such, it is important to build a range of functionality, which can
be split into elements within the trade cycle.
Some banks have included offering end-users access to pre-trade
services, such as research and market data. Whilst these are
complimentary and mirror the services offered by other proprietary
bank platforms, at this point they are not considered to be
essential. A white label service allows a client bank to brand the
site as its own and the upstream bank is invisible to the end-user.
Clearly, it sends mixed messages when research is provided to
clients in the name of the upstream bank.
Another important element is the download of trade data from the
platform to a client's Treasury Management System. Bank settlement
must be quick and with little or no manual intervention, allowing
all parties to the trade the benefits associated with STP. Although
not essential, the provision of CLS services by the upstream bank
can differentiate the underlying service by helping to alleviate
pressure on credit lines.
This is the fundamental element within the trade cycle. White
labelling must focus on the successful execution of trades, with
essential components focussing on the system, liquidity and
1. System requirements - The white label platform must be robust,
ensuring that it remains online and provides prices on a 24-hour
basis. It must deliver automated prices to the end-user in a time
acceptable to all parties, whether the prices are coming from the
upstream or client bank. It must be easy to use, both for the
end-user and for those at the client bank: neither clients nor bank
employees will support the use of a system they do not understand,
as they will prefer to deal over the telephone in the traditional
manner. The system must be configurable, allowing the end-user to
set up the trading screens in a way most appropriate to them, for
example to view the prices of currencies they most often trade.
Users of the platform at the client bank must also be able to
configure their screens: one of the benefits of e-commerce is that
it allows bank-users to spend less time on administration but this
will only be the case if the system allows a level of
personalisation. In addition, streaming rates seem to be the market
standard at this point, and so these should available.
2. Liquidity - This is another core element of white labelling. The
provision of a wide range of global currencies and crosses is
essential, with an appropriate depth of liquidity and 24-hour
trading forming a part of the service package. This allows the
client bank the option to extend the currencies offered to clients
and to improve its level of service by allowing trading in other
time-zones. Under this scenario the provision of liquidity may be
transferred to the upstream bank after the client bank stops
trading for the day.
3. Service The system and liquidity components, whilst important,
only act as pre-requisites and thus should be seen as minimum
requirements for any white label offering. The provision of service
and the development of a bank-to-bank relationship are the most
important elements of all parties. For too long Banks and software
providers have focussed on technology and liquidity, whereas a
white label service should be differentiated through the additional
services that surround the basic components, and the client bank
must have the reassurance of offering services with a trusted
Client support is a core component relating to both the client bank
and the end-users, the importance of which cannot be
underestimated. The decision by a client bank to agree to white
labelling is key to their strategic customer focus, and an upstream
bank must provide a dedicated team to users of the system at the
client bank and end-users. For example, in the case of the dealing
platform being unavailable the end-user needs the alternative to
trade over the telephone, either with the client bank or direct
with the service desk.
Relationship is key
Over the last 3-4 years a number of articles have been written
about e-commerce systems causing the demise of relationships
between banks and customers. The argument is that an e-commerce
platform offers efficiency, whilst reducing the need to speak with
a sales person. It is interesting to note that the most important
element of a white labelling service is relationship, as a client
bank must have the confidence that its client-service is in the
hands of a trusted partner. For example, the relationship must be
sound, ensuring the upstream bank does not approach any of the
end-users, and the upstream bank must be willing and able to
support the client bank with sales and marketing: without which the
implementation has little chances of success. White labelling must
be approached as a long-term partnership between the two banks,
with the aim of developing sustainable profit for both parties.
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