Since the arrival of the smartphone in the early aughts, the number of smartphone users has continued to grow, with an estimated 6 billion users in 2024. This number is expected to steadily increase in the coming years, making it highly likely that most readers of this article would know what an app is. People depend on apps for everything these days, from keeping our appointments and inspiring new ideas at work to entertaining us with the latest shows and checking on our vitals.
Insofar as apps have become ubiquitous to many of us, there is a subset of apps that seeks to be even more all-encompassing. Indeed, this subset seeks to keep users locked within their own systems as much as possible, offering everything from fresh content and entertainment to shopping and even some savings and financial services backed by a retail banking solution. These kinds of apps are known as super apps, and if your bank isn’t aware of these yet, you may be lagging behind your competitors.
Here’s what you need to know to prepare for super apps, including how your bank can use them to its advantage.
What Are Super Apps?
Chances are you’ve already encountered a super app without necessarily knowing that’s what it was. Simply put, super apps are mobile applications that seek to become an all-in-one user experience. Supposedly, one of the founders of BlackBerry, Mike Lazaridis, coined the term back in 2010. He foresaw that apps would eventually attempt to contain users within their own systems, calling super apps “a closed ecosystem of many apps that people would use every day because they offer such a seamless, integrated, contextualized and efficient experience.”
Today, a super app does more than offering multiple functionalities and features to users. Instead, it might house an in-app currency that users can shop with, book transportation or travel reservations with, or send to other super app users as gifts.
The trend has mostly been for super apps to grow from a relatively small app with simple objectives, slowly adding functionalities over the years until the app touches almost every facet of the user’s life. Bills payments, banking, investment, and even entertainment can all be had within the super app’s closed but ever-expanding ecosystem. Open APIs and the ability of modern apps to share data with one another have led to this point, and all signs point to even greater integration and collaboration between discrete apps in the future. It’s not an exaggeration to think that eventually, every app will be a super app.
What Does This Mean for Your Bank?
If your bank positions itself correctly, it could become the preferred depository partner of a super app. This means that any financial transaction—such as payments, e-currency purchases, or savings—could wind up being coursed through your bank. As a result, your bank could see a sharp increase in deposits and clientele, improving your ability to speculate and invest.
For their part, super apps are typically incentivized to work with banks as a financial service partner, rather than attempt to operate as true banks themselves. This is because of all the regulatory hurdles they would have to face and overcome before being permitted to operate as such. Apps would rather integrate into a bank’s API and leave the actual banking functionalities to the bank itself. On the bank’s end, this is beneficial in several ways: it can either charge a subscription fee from the app, or it may elect to charge on a per-transaction basis, depending on whichever it feels is more advantageous.
How Much Will an Upgrade Cost?
To be clear, there may be an initial investment necessary for an undertaking such as this. Tech upgrades rarely come cheap, and depending on your bank’s current IT infrastructure, you may need to enact upgrades to several systems before being fully equipped to partner with a super app. However, the decision to simply ignore the trend of open banking and API integration is probably not in your bank’s best interest, in the long run.
For one thing, your competitors are probably making these same preparations already. They may be setting aside the capital necessary to complete any tech upgrades that will allow them to remain competitive and relevant, even with the arrival of super apps and advanced financial technology. To forego making these preparations would seriously compromise your bank’s ability to collaborate with these new players in the financial sector, considering that said players are likely here to stay.
What’s Needed to Prepare for This?
First of all, your bank will need a software platform that will be able to interface with the prospective super app partner. The software should be hosted on the cloud and should integrate seamlessly with your current tech stack. Ideally, it should also feature a browser-based interface to limit the need for bank operations interruption for the sake of software installation and upgrades. Of course, your upgrades don’t stop at software. You’ll need a team of specialists to manage accounts, keep systems updated, and maintain internal operations.
Major systems changes can be intimidating, but to simply stand pat and rely on obsolete ways of doing things could spell doom for your bank. Find ways to include strategic partnerships with super apps so that your bank’s brand remains relevant in the years to come.