On the consumer side, super apps, or digital front doors, are a complete ecosystem of services and offerings that have been integrated into a single platform — a one-stop-shop for our digital needs. On the business side, super apps are a massive opportunity for all financial institutions. They can leverage APIs, third-party integrations, and open data architecture in an ecosystem that delivers a fuller financial view and powers better money movement and customer experiences.
“Banks and fintech have a big opportunity to figure out how to collaborate to serve both the business community and end-users,” says Lloyd Fernandes, Product at Envestnet Yodlee. “Consumers flock to them because they’re multi-faceted platforms that offer an extremely personalized experience on any device.”
For example, Google is essentially a super app. In one place, consumers can look for restaurant ideas, find reviews, examine menus, make reservations, get directions and so on because of all the integrated services — from Yelp to Open Table to Google’s ecosystem of apps — working together.
Most U.S.-based tech giants, like Facebook/Meta, Apple, Amazon, and Netflix, have ecosystems that are primed to become super apps, Fernandes says, but the consumer adoption in the U.S. is lagging. At the same time, WeChat, Alibaba and Alipay in China have also come under regulatory scrutiny. Anti-trust regulations in the U.S. and worldwide are poised to crack down on corporate monopolies or oligopolies that threaten a healthy competitive environment by leaving very few choices for consumers. Given the current business, regulatory and economic environment, providing a one-stop-shop for our digital experiences needs to be reimagined.
Why fintech should prepare for the super app trend
Financial institutions and technology services companies collect and thrive on enormous user data. When used diligently to service a consumer’s changing financial needs, that data can improve the consumer experience on every axis. Whether it’s shopping for investment opportunities, credit decisioning, selecting a mortgage provider, etc., using the financial data already available in the ecosystem quadruples the business opportunities for financial institutions and technology services. However, with this great opportunity comes significant responsibilities as well.
“You don’t want any one entity to be the superpower,” Fernandes says. “Democratizing this data is a healthy way for that consumer or business to benefit from their financial relationships.”
When super apps formidably aggregate primary financial data together with the user’s identity, they stand a much better chance of servicing multiple financial needs — for example, applying for a small business loan with one financial institution, a personal credit card with another, consolidating air miles to dollars or vice versa, or even optimizing various accounts at a large institution. That aggregated data sourced directly through different financial institutions using Open Banking API or other trusted methods provide accurate and timely financial information about the customer. That is the true power of a super app: unbiased options for consumers while all weaved together with the security and reliability of a standard offering.
“It comes down to not just trusting one data source but using a triangulated method to get a holistic picture,” Fernandes says. “There are a lot of good things that can come out of this, just through banking and financial institutions opening up, and providing the same accurate method of sharing some of this data with the permission of consumers and businesses.”
The goal is to open the ecosystem across financial institutions and all related service providers, large and small. It’s not just about profits, which come from providing more services. Instead, this need is really about providing equitable financial services for all. This does not only apply to the top-tier financial providers but all small and large technology and financial services organizations.
Becoming part of the super app ecosystem
There are a few ways to prepare to leverage the super app trend as it grows. On the tech side, super apps are a relatively new idea, ushered in by the digital acceleration of the last few years. To participate, institutions must ensure that they have a modern enough architecture.
“There is substantial investment needed in enabling such financial infrastructure,” Fernandes says. “Financial organizations need to think about not what they’re doing today, but what they should be doing to serve tomorrow.”
In particular, organizations should ensure they’re establishing best-in-class API standards and capabilities and not building in silos. Organizations must also recognize that while creating a standard framework for open data architectures and APIs will help them participate in this new digital ecosystem, it’s never one-and-done.
“We need to continuously re-evaluate that spectrum of tools and processes that make the most sense,” Fernandes explains.
An example is a generational piece — does your company offer the right ways to communicate with different users? Few younger consumers will be interested in logging on to an app or website whenever they need to communicate with their bank. Companies need to evolve as preferred methods develop.
On the business side, leadership plays the most significant role in setting a company up for success in the super app world. “Whether it’s making a profit for your organization or improving the life of the consumer or driving benevolence in general, requires leaders thinking beyond just their organizations and personal ambitions,” he says.