White-label fintech startups such as FIGO, Yodlee, 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. Next to that the cost of building a brand is substantially lower, margins as a result also and they do typically do not own the customer, with the risk that the big guys squeeze them out eventually. So this works nicely in a very fragmented market, with clear economics of scale.
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.