The Advent of the Super App in Banking – How should Banks approach it?
There is a great deal of transformation happening in the banking industry. With the advent of innovative technologies, Fintech’s and technology companies providing banking services, competition in the banking space has increased multi-fold. Now even the non-banking companies have started providing financial services for e.g., WhatsApp started providing payments, Apple has its own wallet eating into a bank’s share of revenue. It is time for the banks to redefine and reimagine their role in a customer’s life and provide service at every touchpoint by embedding themselves in their daily activities. To fend off competition, aggregating multiple services such as financial transaction processing with aspects of personal life, super apps have now emerged as a solution for banks on the quest to win more customers.
Consumers are flooded with several types of apps in the market increasing the cognitive load on the consumers. Banks and other companies are now trying to grab the market share moving beyond what they traditionally offer to their customers. There is a battle happening between companies not just in their operating space, but companies are looking outside and are poaching customers from other businesses. For example, Amazon, Walmart, Meta, and others into financial services, Alipay transformed payments into an e-commerce juggernaut in China. Other Asian examples include Paytm (India), Grab (Southeast Asia), WeChat (China), and Kakao (South Korea), WhatsApp app providing payment services. Banks need to defend their territory and need to be future ready as their customer will prefer to use a single app for all their needs.
“Gartner expects that by 2027, more than 50% of the global population will be daily active users of multiple super apps. The super app concept will also expand to include enterprise mobile and desktop experiences, such as workflow, collaboration, and messaging platforms.”
So how should the bank be approaching the journey from app to super app? Taking a phase-wise approach is the best approach with right mix of investment with agile methodology implementation:
- Bank should first be focusing on increasing their revenue by introducing prelogin features for everyone. Prelog in features can be a major source of prospective clients for banks as now they can target them with personalized offers on cards, loans, and other financial products. Innovative use of push notifications can also nudge prospects in accessing the mobile app. Integrating digital onboarding journeys for these prospects for accounts, loans or cards will further enhance the user experience for the new customers.
- In the second phase they can target their own customers with the personalised offers providing push notification to the customers leveraging data and analytics from the platform. With 360-degree view of their customers by using account aggregation, they can target other bank customers with services and functionalities better than what other banks are offering. Providing budgeting, goal management, personal financial management and savings, banks can nudge their customers on applying for financial products like FD’s, insurance, or mutual funds. This will increase the customer stickiness.
- In the third phase bank can look at providing lifestyle features to their customers so that their needs can be met from a single app. These include cab booking, flight booking, hotel booking, bus booking, gift cards, ordering food, buying groceries, wealth management, insurance. Other lifestyle features like airport lounge access, redemption of loyalty points, offers available at merchants etc. can be offered as a marketplace in the application The more connected and frictionless these user journeys are, probability of customers sticking to the bank will increase.
Retail Banks have a tremendous opportunity to partner with players from different industries to build a loyal and integrated customer engagement ecosystem. Banks which are part of a larger group of companies or banks which actively partner with other companies can put forth new value propositions to customers based on the strength of the combined companies. This could range from combining rewards and loyalty programs to offering differentiated products and services by leveraging the multiple business entities. This entails providing a seamless customer experience design across the products, services, and customer touchpoints of the various entities. In India, AU Small Finance Bank has rolled out a super app in response to the evolving customer expectations and demand. It offers all lifestyle services in addition to the daily banking transactions.
Banks need to find a right partner who is experienced in helping them in planning, building the right customer experience using scalable design, robust architecture, optimal use of technology, using right Fintech partners and aligned with bank digital strategy guided by their business strategy. Tagit can help Banks in building a super app thereby increasing their customer base and revenue and enhancing customer loyalty with new and innovative features.
Read our Case Study on how we helped build a super app for AU Small Finance Bank
With Tagit’s solution, we can now offer a more tailored experience across all platforms while striving towards greater customer loyalty and satisfaction. The solution has helped us achieve our vision of reaching out to the unbanked and underserved sections of the society on a modern, secure, and scalable platform
– AU Small Finance Bank
