Super apps and the fintech revolution in 2020

By Helcio Nobre, chief product officer, Rapyd

Financial services are the new frontier for the biggest tech companies in the world. These titans of technological innovation are turning their attention to banking and personal finance so they can become true "super apps." In doing so, they hope to emulate the success of Asian super apps like WeChat, Grab and Gojek, which bring under one roof a variety of app-related services, from ride-hailing to banking to ordering takeout.

What's clear is that the tech companies with the best chances of success are those that can answer users' real financial needs in a way that truly captivates loyalty and engagement.

While I won't make any bets about which company will be the super app that breaks through, I have no doubt we'll be hearing a lot about the quest for super apps in 2020.

What is a super app?

A super app starts as a single application, like ride-hailing or messaging. As the app adds new services, its utility becomes more intertwined in the consumers' daily life. Consumer trust and loyalty increase as the super app consolidates more and more services ultimately stealing share from other brands. Apps that implement this strategy and embed their services fully into the consumers' local and daily routine are on their way to becoming "super brands."

Many super apps have gained “super brand” status in Asia. Take, for instance, WeChat: It's probably the most well-known Chinese super app, with more than a billion daily active users. It has grown from being used primarily as a messaging tool, to becoming a platform for placing calls, using social media, hailing transportation and making payments.

In Singapore, Grab provides ride-hailing, payments and food delivery services from a single app, while Gojek does nearly the exact same thing in Indonesia. It is this all-encompassing offer that the tech giants of the West are looking to replicate.

New financial services

In the past year, many major U.S.-based tech companies have made some kind of finance-related announcement.

In March, Apple announced the launch of its Apple credit card in partnership with Goldman Sachs. More recently, Google announced that it will start offering checking accounts in the U.S., while Amazon and Airbnb are partnering with JPMorgan to provide an e-wallet for payment processing and cash movement.

Uber's strategy, meanwhile, is based around its new Uber Money division. It will offer drivers real-time access to their earnings rather than them having to wait for weekly payments or cash out using another app. It will also offer them its own financial products based on their income and cash flow data.

These data-rich businesses see an opportunity to offer better financial services to a massive pool of users who they understand better than anyone else. In doing so they want to extend their ownership of the user experience and to not be left behind by any competitors making similar moves. But their success will depend on more than just the data they hold.

2020, a year of transformation

Anyone looking to design the killer super app and become the next super brand needs to consider which transactional services their users truly want. To do this, they should heed the words of Sidu Ponnappa, SVP of engineering at Gojek, who has stressed the importance of payments in super apps: “The biggest moat Gojek built is payments. Once you're handling money for a user, you can build a castle of services within it."

By providing transactional capabilities across multiple needs and services inside of a single app, brands with super apps put utility, local convenience and seamlessness above all.

The best approach for those on the path to super brand status will be to capitalize on "fintech-as-a-service"by using APIs to scale fast and open up multiple new local markets simultaneously. Fintech-as-a-service provides the link between today's thriving, tech-forward business and the legacy financial systems that drive the majority of global commerce. It unlocks a new playing field for financial innovators everywhere by allowing them to deliver exceptional customer experiences for localized and cross-border commerce.

This is what true fintech transformation will look like in 2020.

Cover image: iStock