As the financial industry continues to evolve, businesses are increasingly searching for solutions to expand their services and grow their businesses. White-label banking solutions are gaining popularity due to the increasing demand for customizable and cost-effective financial solutions. However, there are various ways to implement such a solution, such as custom-made solutions, SaaS providers, or purchasing a source code license. In this article, we’ll focus on source code licensing and how it can fit into the business model of a financial institution.
What is Source Code Licensing?
Ready-made source code solutions can become the foundation of a system that allows for the creation of various online banking products, such as e-wallets, neobanks, digital retail banks, and currency exchanges. While many companies offer banking software on a subscription basis, this usually comes with limitations on business growth and product customization. In contrast, purchasing the banking software code outright provides complete control over the product, allowing for customization of functionality and expansion of capabilities. When provided with the base source code, businesses can reprogram it by adding, removing, or changing functions to suit their needs, with the ability to compile and use the version they require.
A source code license allows users to access and modify the source code without limitations. Such licenses can provide a competitive advantage by offering unique features and functionalities that are not available in SaaS or SDK solutions. Although they come with a higher cost, they can provide cost-effective solutions and allow for easier customization and integrations in the future. A great bonus that comes with such licensing is the option of technical support and maintenance of the codebase, saving businesses tons of resources in the nearby future.
Why buy a source code license?
If you have an established developing company with a relevant stack that plans to have the time-to-market step as efficiently as possible, or if you want to completely change your existing solution but do not want to spend money on retraining your coders, purchasing a source code banking solution can be the most suitable option. Even if a system without such a product solution used to be ideal for your requirements, your needs will change sooner or later, and with the source code, you can respond as quickly as you need. This will also come in handy for medium-sized companies with established IT staff who want to save their own time to accelerate development to launch their product faster.
What will you get?
If you’ve determined that it’s the right time to purchase a source code banking solution and that your company meets the necessary requirements, you may be wondering how it works. Essentially, such software is a complex system consisting of several components, including:
Core banking, which is responsible for conducting transactions and operations.
Open API, which automates business processes, controls the status of accounts, manages clients, and contains information on clients.
Multiplatform client applications seamlessly integrated with the white-label banking platform.
AML/KYC/KYB solutions that are designed to help businesses comply with regulatory requirements by verifying the identities of their customers and partners and detecting potential money laundering activities.
Fees and Limits module, which will manage costs and generate revenue while controlling risk with transactional and daily limits.
These components work together to provide a secure and efficient banking system that can handle a high volume of transactions and provide a range of functionalities to meet the needs of different businesses.
Business advantages of open source banking software
Open source banking software provides significant benefits for businesses in the financial technology (fintech) industry. This article discusses some of the business advantages of owning an online banking system source code.
The most obvious advantage of owning an online banking system source code is that it allows companies to bring their products to market more quickly and cost-effectively. By purchasing a pre-built system, businesses can save time and money that would otherwise be spent developing core banking software. This enables them to start generating revenue and attracting clients before their competitors who are still building their systems. Additionally, having access to the source code enables businesses to customize and innovate at their own pace, without being tied to a specific vendor or locked into a particular system.
Owning an online banking system source code also enables businesses to add more features and functionality to their products. For instance, they can have user groups, different levels of access, withdrawal limits, and commission changes in the product’s back office. It may also come with pre-built analytics and customer relationship management (CRM) systems that can provide real-time insights and faster know-your-customer (KYC) processes. This allows businesses to create advanced loan products with unique repayment terms and interest rates that cater to specific customer needs.
Moreover, custom integration with social network modules enables businesses to provide an easy-to-use interface for customers to transfer funds and communicate with their social network contacts. This feature can increase customer engagement and retention, as well as improve customer satisfaction. Custom integration with CRM systems like Salesforce can also help businesses manage customer relationships and improve customer engagement.
By leveraging these features, businesses can provide a better customer experience and differentiate themselves from competitors. Such ability to innovate and differentiate themselves from competitors while also saving on development and maintenance costs makes it a valuable investment for any financial institution looking to expand their business and provide secure financial services.
In conclusion, source code licensing provides greater control, flexibility, and cost savings in the long run. While outsourced development and the software-as-a-service (SaaS) model may be viable alternatives, selecting the source code licensing can balance the company’s needs for cost-effective solutions with their desire for flexibility, customization, and control.
Source Code Licensing or Outsourced Development?
Source code licensing can be a reasonable alternative to outsourced development of your banking product and offer a competitive edge. Instead of starting from scratch, financial institutions can leverage pre-built source code to accelerate the development process. This not only saves time but also reduces development costs, as it eliminates the need to hire and train a large team of developers. With faster development times, prospective fintech startups can launch their products and services to the market quickly, gaining an advantage over competitors who may still be building their systems from scratch. This can lead to increased revenue and customer acquisition in a shorter period. Even if you have your own inhouse tech team, source code can save up to 10 months of development of core banking and help to avoid possible pitfalls by providing a ready-made and tested solutions.
Source Code Licensing or SaaS Business Model?
SaaS has become a popular solution for expanding fintech companies. It’s easy and fast to set up, does not require IT infrastructure and possibly offers the the most cost-effective kick-off to new banking products. Nevertheless, source code licensing can offer significant advantages over this model.
Firstly, source code licensing allows clients to fully customize and integrate software solutions into their existing systems and processes, giving them complete control over their end product. SaaS solutions, on the other hand, offer limited customization options, making it challenging to tailor the software to specific business needs.
Secondly, source code licensing offers greater control over data and security, enabling clients to host their own data and implement their own security measures. In contrast, SaaS solutions store data on the provider’s servers, which can pose a security risk.
Lastly, source code licensing gives financial institutions a competitive advantage by enabling them to add their own features and functionalities to the software, making them more attractive to customers. SaaS solutions, on the other hand, limit their clients to the features and functionalities provided by the provider.
Although SaaS solutions do not require a large budget for the initial phase, as the business grows (therefore transaction volumes and number of accounts increase), SaaS service costs can quickly become a significant expense and lose their cost-efficiency. At one point switching to a more feasible and versatile solution can become a dire necessity.
Source code licensing, on the other hand, requires a considerable upfront investment and possible regular infrastructure fees (if not a server less solution). Yet the in the long term and with enough scale such expenses can become economically justified considering flexibility that such a solution can provide.
Why choose Finhost source code solution?
Finhost is the ideal choice for financial institutions looking to expand their business and provide secure financial services. Our source code solution offers complete control over the product and its customization according to specific business needs. By bypassing limitations or direct bank integrations, our solution allows for incremental growth of SaaS fees and complete ownership of the end fintech solution. Our clients can make modifications and improvements to their product at any time without the need to rely on external parties for updates or support.
With over 7 years of experience in the FinTech industry, we have a proven track record of delivering quality solutions. Our fintech source code can save you over a year in software development and offers the flexibility to customize your end product to fit your business needs. In addition to providing complete control over product customization, owning the source code with Finhost also provides ease of setting up support teams for both technical and consulting services. With our expert consultants and various training options, our clients can quickly set up support teams to provide assistance with any technical or business challenges they may encounter. This not only saves time and resources but also ensures that the product is operating at its full potential and delivering high-quality financial services to clients around the world.
With Finhost, you can rely on our proven track record of delivering quality solutions while also having the flexibility to make modifications and improvements to your product as needed. Get in touch with us if you require comprehensive banking software solution that provides complete control, customization, and support. We cater to a wide range of organization types, including mid-size businesses, enterprises, and prospective fintech startups. Choose Finhost and experience top-of-the-line banking software solutions.