While full-stack fintech startups are taking aim at large financial institutions, white-label fintech startups such as Yodlee and Currency Cloud operate behind the scene, often in collaboration with incumbents. It's a de-risked approach that is less prone to unwanted attention from regulators.
Banks want to know: “Are these Fintech startups going to eat our lunch?” The answer, as always, is “it depends”. It depends on whether the fintech startup is a “we bring your lunch” type or a “we eat your lunch” type: 1. We bring your lunch. This is traditional fintech, the modern version of which is a cloud delivered “white label” service. These ventures make no attempt to sell direct to consumers or business. The customer is always the bank or a Full Stack bank competitor; their brand is not visible to consumers and businesses. Examples are Yodlee and The Currency Cloud. 2. We eat your lunch. These are also known as “full stack Fintech”. They are regulated financial services firms that use technology to sell directly to consumers and businesses. Examples include Lending Club, Ondeck and Transferwise.