White labelling is a business model where a financial institution (the "provider") partners with another firm (the "partner") to offer financial products and services solely under the partner's brand.
According to the EBA, key aspects of this model include:
The provider, typically regulated, holds ultimate responsibility for compliance, while the partner handles customer-facing activities like marketing and managing customer relationships.
White labelling is applied to various financial products, such as payments, deposits, credit (like "buy now pay later"), and open banking services.
Benefits include cost savings, faster market entry for partners, and potentially increased access to services for consumers.
Risks involve a lack of clarity for consumers regarding the actual service provider and contact points for issues. This model also presents supervisory and AML/CFT challenges.
The EBA is focusing on enhancing supervisory practices rather than proposing new laws, aiming for better consumer disclosures and oversight by national authorities
