Building a decisive super-app strategy

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Each financial institution of each measurement in each market will quickly be pressured to make a high-stakes resolution: What ought to we do about super-apps?

A financial institution’s reply to this easy, highly effective query may imply nothing lower than rewriting its technique and rewiring its enterprise mannequin. And as we describe in our latest report on the top trends in banking, we predict each financial institution must be fascinated by it proper now.

Right here’s why.

A second years within the making

The time period “super-app” itself dates again to 2010 when Mike Lazaridis, the founding father of BlackBerry, used it on the Cell World Congress. The important thing characteristic he imagined was integration with different apps. As a substitute of switching between totally different standalone apps on their smartphones to play music, submit on social media, and order meals, the consumer of a super-app would be capable to do all of that in a single place.

On this manner, a super-app is a bit like a shopping center, the place comfort is the important thing promoting characteristic. And if that’s true, then the super-app is to incumbent banks right this moment what the shopping center was to high-street retailers within the late Nineties—a strong magnet that draws prospects and calls for an efficient strategic response.

That’s as a result of super-apps have gone from imaginative and prescient to actuality within the 12 years because the time period was coined. The 2 largest super-apps right this moment, Alipay and WeChat Pay, have round one billion month-to-month energetic customers every. They provide companies in the whole lot from journey to leisure to insurance coverage, funds, and banking. Many different would-be super-apps supply an analogous vary of companies, together with Revolut, Kakao, Line, Rappi, and PayPal. All of those platforms supply embedded cost options, and plenty of additionally supply credit score, monetary administration instruments, and recommendation.

By aggregating all digital interactions, super-apps intention to personal the shopper relationship throughout a consumer’s total digital life. That prospect is drawing a rising quantity of consideration and competitors all over the world. Within the US, as an example, 47% of non-bank digital platforms are investing in and plan to launch embedded finance choices sooner or later. Embedded finance is projected to generate an extra $230 billion in revenue in the US by 2025.

Tremendous-apps intention to dominate their prospects’ digital lives. They have to embrace monetary companies to do this, since in any other case customers will go away the app to fulfill their wants. But whereas the monetary companies provided by super-apps are extra a method than a strategic finish in themselves, the size of their platforms makes them a strategic menace to many banks—even perhaps an existential one.

So what are their choices?

The super-app alternative dealing with each financial institution

There are three totally different paths a financial institution can take to answer the expansion of super-apps.

First, they’ll keep the course and ignore the entire thing. In a single sense this might focus sources on constructing a financial institution’s model and bettering the experiences it presents, however in the long run we count on this might result in erosion of market share and income.

The second is to companion with a super-app. This might give a financial institution entry to an enormous buyer base and result in a big improve in transaction quantity. It may additionally give a financial institution entry to wealthy buyer information. In opposition to this a financial institution would wish to weigh the chance of shedding model presence, taking a again seat in its buyer relationships, and in the end commoditizing its choices.

The third and doubtless riskiest possibility is to attempt to construct your personal super-app. That is probably the most formidable alternative and the one that will demand probably the most funding. It could require virtually an entire organizational overhaul. Few banks that take this path are more likely to succeed, however people who do will reap the best rewards.

In the event you’re intrigued by this path, there are a number of key questions that you just’ll have to reply:

1. What’s our revolutionary acceptance innovation? It’s no coincidence that WePay, Alipay and PayPal all grew from providing prospects new methods to just accept—not ship—funds. For WePay and Alipay that was scanning a QR code, whereas for PayPal it was letting people settle for bank card transactions over eBay. A brand new super-app will want an analogous ground-breaking innovation.

2. How will we construct a big community of customers? To succeed in operational scale, a super-app will want a compelling purpose for each side of each transaction to happen there. It’s solely a “tremendous” app if there’s a community impact. (Your brand alone is not going to do the trick.)

3. How will we handle an open platform? Each true super-app right this moment is an open platform. For a financial institution, that can imply permitting non-customers to make use of the app. Banks might want to resolve some attention-grabbing safety and consumer expertise challenges to attain this.

4. What’s our killer worth proposition? That is the hardest query to reply, and an important one. Tremendous-apps are a fiercely aggressive market. Anybody hoping to outlive might want to supply a very differentiated expertise.

There are giant, influential banks which have already opted for every of the three attainable methods. No matter possibility you select to answer the rising dominance of super-apps, it is best to start by evaluating the place you’re best-in-class, the place you need to and might develop your capabilities and merchandise, and the place you may benefit from partnerships.

In case you have any questions on what super-apps imply in your financial institution, you may attain me :
Read report

Meet me at #SIBOS: Accenture’s monetary companies leaders can be at to share our newest insights and options, and to showcase how we ship on the promise of expertise and human ingenuity that can assist our shoppers meet the long run head-on. Discover us at In the event you’ll be there, don’t miss my mainstage Highlight on digital worth presentation, “Conquering the metaverse: Ought to securities corporations begin shopping for plots of digital land?”, on October 11, 2022. See you in Amsterdam!