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Super-apps are shaking up banking and financial services

  • Publish Date: Posted about 2 months ago
  • Author:by MERJE

Super-apps are still emerging as technologies but they do promise practical benefits and richer experiences. They are built as umbrella platforms used for personalised app experiences through a series of mini-apps and, in short, can provide a more engaging and powerful experience for users. Increasingly, industries are adopting super-apps to gain a competitive advantage.

This is especially true of the banking and financial services sector, within which many firms are on a journey to building super-apps as a full ecosystem that consolidates the services and functions of multiple mobile apps into one single, easy-to-navigate app.

This means that customers can handle their personal finances all in one place, rather than darting between individual apps, something which is especially important in the current economic climate where costs and interest rates are rising at unprecedented rates and people are feeling increasingly overwhelmed by money worries.

Most recently, Revolut, a British fintech that offers mobile-only, branchless banking services - also known as a neobank - announced that it’s going forward with a super-app model. This app does more than what most neobanks do.

Many offer no-fee deposit accounts with a debit card, access to fee-free cash points, savings and budgeting tools and early access to payslips. Revolut goes further, by combining both retail and business banking in one app, along with a range of services, from banking to insurance, loans and cashless payments to stock trading, crypto, QR code or mobile payments and merchant banking.

The latter puts it in direct competition with successful fintechs Stripe and Adyen and has allowed the firm to mirror the ambitions of PayPal and Facebook.

How is Open Banking powering super-apps?

The rise of Open Banking around the world is enabling super-apps to use financial data from multiple sources to target customers’ needs and deliver financial products. This will give the platforms an even greater opportunity to provide a range of financial services and tailor the right services to each user.

Open Banking will power super-apps by:

  • Maximising personalisation: Open Banking creates an ecosystem that proactively helps platforms leverage customers’ data to create truly tailored experiences.

  • Accessing everything on one platform: Once the super-app is able to use Open Banking data, consumers can handle every aspect of their personal finances in one place

  • Using advanced technology: Analytics, artificial intelligence and machine learning can leverage Open Banking data to build customer-relevant products and foster a culture of data sharing and data-driven decision-making across the super-app’s business ecosystem.

  • Connecting the right partners: As Open Banking expands further into open finance and open data, super-apps will be able to access and connect with a larger number of partners to provide faster speed to market for new products and an even wider customer base.

How will super-apps affect banks?

Super-apps integrate financial services into their platforms to provide seamless experiences for their customers. For banks, this means that an increasing number of users may bypass banking apps and simply use the more integrated super-app. Super-apps with digital wallets also make it easier for the users to stay in the super-app ecosystem and reduce their dependence on cash and credit cards.

The regulatory framework around financial services is so stringent that many businesses which operate super-apps don’t have the bandwidth to navigate it on an independent basis, especially across multiple markets and regulatory regimes. This means that super-apps offering eCommerce, loans, insurance products and investing platforms are creating strategic partnerships with both banks and fintechs in their key markets to provide these services for them.

As the popularity of super-apps grows, they could become a much bigger source of competition for banks than either neobanks or fintechs. By keeping users engaged on their platform, they could make it almost impossible for banks to convince customers to leave the super-app in order to use the bank’s standalone digital banking apps.

What should banks do now?

Accept changes to the market and try to stay ahead of the curve by promoting their own offerings.

Extend their reach by embedding invaluable services within super-apps or other digital financial services.

Compete head-to-head with the super-apps by launching their own wide-ranging super-app encompassing both financial and non-financial offerings.

In order to compete with the rising and established super-apps, these banks will need to:

Establish a vision: Banks need to pinpoint what their role will be in this new era before undertaking the transformation to become a financial services or lifestyle ecosystem. Banks that don’t carve out a defined niche could find themselves made redundant.   

Embrace open data: Super-apps thrive on the free flow of information between entities. To compete, banks will need to explore open data architecture and application programming interfaces too.

Harness data: Banks will need to build data management capabilities like analytics algorithms and machine learning to unlock the value of their own data, as well as third party data, and launch new user experiences and journeys.

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