Fintech Future: Super Apps

The fintech revolution is creating waves in what has for long been tranquil waters. Banks are looking for differentiated tactics that will help keep them relevant in changing times that are driving consumers to an increasingly digital landscape. Neo banks, also known as digital challenger banks, are gaining traction faster than could have been predicted, laying an emphasis on convenience and user experience.

While where this digital revolution will lead to in the foreseeable future is debatable, though exciting, one cannot help but wonder where this fintech revolution will finally culminate. While most banks are attempting to redesign their services and digital experiences on the lines of the rapidly growing digital challengers, Asia provides an indication of where the fintech market could be heading.

The fintech revolution in Asia is a growing one, but not without challenges – the foremost being the shift of cash-based economy to a digital one. The advantage here, however, is that companies in Asia are witnessing firsthand the consequences of ignoring digitization on a global scale. Interestingly, Asian digital banks are being launched by existing banks, looking to disrupt themselves, or by large technology and telecommunication companies.

Before looking into the evolution of Super Apps, count the number of apps on any mobile device in your vicinity. It can be safely assumed that each mobile device will have at one or more of the following: social media, finance, food delivery, on-demand transport, utility applications for mobile and home telco services and e-commerce apps. Now imagine packaging all that convenience and technology in one app.

That is exactly what ride-hailing companies like Grab and Go-Jek in South East Asia as well as social and payment platform WeChat in China are attempting to and, in some cases, have already designed. Anything and everything that is needed for daily life in these countries is possible through these applications. Ride hailing, food delivery, grocery delivery and even doctor appointments – transactions done through one ubiquitous platform. Paytm in India, which started with the singular purpose of being a payment platform, now offers food delivery, utility payments, secure loans as well as the purchase of train and movie tickets. This phenomenon is slowly spreading, with banks in India providing users with the option to do all the above through one banking application.

Now envision all of that housed within a banking ecosystem. While Asian companies have been looking towards the West for inspiration to leverage technological advancements in different ways, it may be time that North American banks look at Asia for that exact same inspiration. Moving beyond slick interfaces, financial institutions need to inject themselves into the everyday needs of their customer. One single app. Check account balances, conduct money transfers, hail an Uber, order dinner through Foodora, apply for a loan, shop for clothes and even book travel - through a single, easy to use interface.

How? Partnerships. Whenever innovation is discussed, whether internal or external, partnerships often emerge at the forefront. Now while these partnerships cannot be established overnight, a strategic objective towards maintaining relevance – not just for tomorrow, but for the future – will enable banks to truly stay one step ahead of their digital challengers, elevating the fight for user experience to new grounds.

Why? Imagine the power of driving consumer insights through the data derived from monitoring the daily engagement rate of a banking app – the available data can empower banks to understand their customers better, allowing innovation teams to design enhanced products and services.

Further, the launch of bank super app allows banks to control the user experience and more importantly, the customer relationship. Apps like WeChat, Grab and Go-Jek have removed the primary bank from the visible equation, relinquishing them to a sidelined presence. Banking super apps provide financial institutions with the opportunity to BE the technology service provider for what constitutes a large chunk of their main transactions.

Super apps can also potentially turn banks into dumb-pipes, akin to what OTT platforms threatened telecommunication firms with in their nascent stages. Telcos soon fought back by transforming into technology firms, offering their own exclusive content and launching digital home hubs, to name a few. The rise of the super app absolutely provides a significant opportunity for banks to monetize on what is currently a rather unknown solution to the end-user.

There is also a differing perspective that rallies against the success of the super app in North America but given the global transition towards convenience, one cannot help but wonder the possibilities.

Interesting reads:

Fortune: Grab vs. Go-Jek: Inside Asia’s Battle of the ‘Super Apps’; March 2019

Bloomberg: Grab to Spend $150 Million on AI to Build Regional Super App; September 2019