The deep dive: The financial super app  

By Gaia Lamperti

‘The deep dive’ is our bi-weekly exploration of a relevant topic, hot trend or new product. For Prime subscribers only.

The race to the so-called “super app” ambition has become inevitable in the tech space, and FinTech has not been exempted. The trend originates from Asia where giants like WeChat, Alipay or GoJek have really earned the super app title as their platforms allow users to shop, chat, book a cab, order food, access financial services and much more, all without leaving the app.

The trend quickly spread and, more recently, it has taken over the European and American market as well. FinTechs are now starting to describe themselves as the “financial super app”, a way to proclaim themselves as the one-stop-shop for all their consumers’ financial needs.

How does it work?

Usually, FinTech companies start by offering a single flagship product and, as their userbase grows, they start adding new features and offerings to cater to their customers in all aspects of their financial lives, from spending to borrowing, investing, saving, transferring etc. They basically try to become the consumer’s first choice when it comes to managing finances, aiming to meet all their needs.

The spread of open APIs has made this process simpler and simpler, boosting innovation and competition in the space. However, it is also true that there is an increasingly evident risk to end up “flattening” the offer, as all the platforms tend to look very similar and offer the same kind of features, not giving users much reason to switch from one to the other.

Who is under the radar?

Arguably, we could now group under the “financial super app umbrella” main FinTech companies including payments giants, trading apps, challenger banks and even BNPL companies.

Earlier this year, Square was testing checking and savings account features for its SMEs seeking to provide a digital-first banking experience, Google Pay started off as a P2P payment app and now is expanding its service offering through a series of partnerships. PayPal too has been describing itself as a financial super app for quite some time now, starting to roll out new features like BNPL payments options. Revolut, Venmo, Affirm Robinhood, and even Coinbase are adopting similar strategies.

Why does it matter now?

Digital financial services’ efforts to build the super app are helping to lure customers from the traditional banking system targeting businesses and consumers alike. Additionally, Covid accelerated this transition, with more people shifting to digital providers to manage their money.

FinTechs are learning the lesson from Big Techs like Facebook, Amazon, Apple which have already mastered the art of providing a platform that combines a lot of services (including the financial ones!) rather than specific solutions. The way to do is will be via more and more partnerships within the ecosystem, collecting vast amounts of data to better understand customers habits and preferences, and implementing simple, efficient integrated APIs architectures.