White labelling for the open banking generation White labelling for the open banking generation White labelling for the open banking generation

White labelling for the open banking generation

Thought Leadership 5 minutes to read
Henrik Alsøe

Global Head of Wholesale, Saxo Bank

Summary:  If you’re a broker or wealth manager serving retail and professional clients the likely secret to your success is probably a combination of ‘front-office’ factors. End users may value your keen and dynamic pricing, your ability to identify relevant new trends and opportunities, your intuitive and easy-to-navigate user interface – or a mix of these and other features.


As we all know, creating a unique and compelling client experience is impossible without the middle- and back-office building blocks that support it. Alongside access to liquidity in major currency pairs and asset classes – not to mention comprehensive execution, reporting and custody services – today’s brokers need to tap into an ever-widening range of functions and services to construct a feature-rich but robust and scalable platform that can adapt quickly to changes in demand and regulation, while handling rising service level expectations. 

To compete effectively, this foundation may include multi-asset global clearing and settlement capabilities, 24/7 support in local languages, financial crime compliance, plus new capabilities that leverage emerging digital technologies to enhance the customer experience, such as the use of AI to interpret and anticipate evolving preferences and requirements. Further, these services and capabilities should be supplied seamlessly via open APIs, enabling maximum flexibility, visibility and speed in responding to customer behaviour. 

In today’s fast-paced, highly competitive and increasingly unpredictable market, there is little case for financial services operators to dig these foundations themselves. Fine margins, ongoing innovation and rapid changes in the expectations of regulators and customers mean that internal resources of brokers must be focused on the front-end value proposition, supported by a comprehensive and well-structured partner programme. The good news is that access to third-party support is easier than ever. Traditional white label offerings are now evolving to become full-service, API-first outsourcing partners, with the tools, capabilities and expertise to support compelling client experiences. 

In different ways, trends and developments in Asia and Europe are highlighting the need for brokers and wealth managers to keep their attention firmly on client service priorities. 

Across Asia, but most dynamically in the greater China market, we’re seeing a strong upsurge in new entrants to the retail brokerage and wealth management space, competing with each other and incumbents for affluent millennial market share, with the omni-channel user interface the key battleground. In many cases, the intellectual property of these disruptors is being generated through high levels of investment in digital engagement via the user interface, with support functions being accessed via open APIs from partner platforms. 

Meanwhile, European FX brokers recently experienced the profound and rapid impact that regulatory change can have on established business models. In July 2018, the European Securities and Markets Authority imposed restrictions on the sale and marketing of products such as contracts for difference to retail customers. There were sound reasons for the change, but it nevertheless constrained what had been a strong revenue stream for some. To avoid significant business disruption, firms have had to quickly reorientate and diversify, many expanding into adjacent markets to offer multi-asset trading and investment opportunities. Regardless of specific drivers of change, all firms must retain the ability to achieve business and operating model change at speed via close and effective collaboration with partners and suppliers with deep expertise and experience in these functionality areas. 

Of course, effective digital engagement with clients is critical in all markets. It is also a moving target. No matter how appealing your user interface, how comprehensive your coverage and how loyal your customers, we all know how quickly the wind can change, with newcomers knocking out market leaders or regulatory changes undermining established business models at short notice. As such, the data that flows between customer and service provider via the user interface is a highly valuable source of intelligence. In a fluid and dynamic competitive environment, the ability to tailor client engagement based on recent activity such as sending targeted news items on specific trading and investment opportunities, can be critical to revenue growth. When selecting outsourcing partners,  brokers and wealth managers should consider their ability to capture, store, analyse and report the client data, in line with regulations and best practice on data privacy. 

Whilst it may not be immediately apparent to the end-user enjoying a uniquely tailored digitised client experience, it is getting harder for brokers and wealth managers to deliver on a standalone basis. Just as client experiences can be tailored to meet very precise needs, so too can outsourcing partnerships. At Saxo, we believe that all white label arrangements and other forms of collaboration between service providers will quickly migrate to use of open APIs to streamline data exchange along the transaction chain. But there are currently many variations that are capable of supporting competitive value propositions. For example, Saxo recently helped leading Italian wealth manager Banca Generali to deliver multi-asset digital trading and investment services to its clients via a joint venture, enabling the firm to compete effectively against fintech rivals.  

This approach contrasts with that taken by OCBC Roboinvest1 , a self-service digital wealth management platform that allows affluent millennials to invest in thematic "playlists", launched by Singapore-headquartered, OCBC Bank last August. Serving as execution and custody partner, Saxo also enables automated trade allocation and rebalancing, with bulk orders aggregated for execution then split across underlying accounts. The seamless exchange of transaction and account data between Saxo and OCBC is enabled via Saxo’s OpenAPI solution, which also facilitates efficient client on-boarding. 

In today’s financial markets, there are no guaranteed recipes for businesses, products or partnerships. In this increasingly evolving, competitive and disruptive world of financial services, brokers and wealth managers should explore how API-driven partnerships can help to maintain their competitive edge through the provision of tools, capabilities and expertise to support compelling multi-asset client experiences. Re-invented as s API-driven partnerships, white label solutions can thrive in an open banking world.


1 assets under management €3.7 million (Feb 2019).

Source: Saxo Bank
Disclaimer

Saxo Capital Markets (Australia) Limited prepares and distributes information/research produced within the Saxo Bank Group for informational purposes only. In addition to the disclaimer below, if any general advice is provided, such advice does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of trading any financial instrument as trading can result in losses that exceed your initial investment. Please refer to our Analysis Disclaimer, and our Financial Services Guide and Product Disclosure Statement. All legal documentation and disclaimers can be found at https://www.home.saxo/en-au/legal/.

The Saxo Bank Group entities each provide execution-only service. Access and use of Saxo News & Research and any Saxo Bank Group website are subject to (i) the Terms of Use; (ii) the full Disclaimer; and (iii) the Risk Warning in addition (where relevant) to the terms governing the use of the website of a member of the Saxo Bank Group.

Saxo News & Research is provided for informational purposes, does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. No Saxo Bank Group entity shall be liable for any losses that you may sustain as a result of any investment decision made in reliance on information on Saxo News & Research.

To the extent that any content is construed as investment research, such content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication.

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments.Saxo Capital Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Capital Markets or its affiliates.

Please read our disclaimers:
- Full Disclaimer (https://www.home.saxo/en-au/legal/disclaimer/saxo-disclaimer)
- Analysis Disclaimer (https://www.home.saxo/en-au/legal/analysis-disclaimer/saxo-analysis-disclaimer)
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)

Saxo Capital Markets (Australia) Limited
Suite 1, Level 14, 9 Castlereagh St
Sydney NSW 2000
Australia

Contact Saxo

Select region

Australia
Australia

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit www.home.saxo/en-au/about-us/awards

Saxo Capital Markets (Australia) Limited ABN 32 110 128 286 AFSL 280372 (‘Saxo’ or ‘Saxo Capital Markets’) is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms, Financial Services Guide, Product Disclosure Statement and Target Market Determination to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Saxo Capital Markets does not provide ‘personal’ financial product advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Capital Markets does not take into account an individual’s needs, objectives or financial situation. The Target Market Determination should assist you in determining whether any of the products or services we offer are likely to be consistent with your objectives, financial situation and needs.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website is not intended for residents of the United States and Japan.

Please click here to view our full disclaimer.