Dare I say it, but this year is shaping up to be the year of the finance “super app.” Since the beginning of the year, I have seen no less than seven companies talking about creating a super app.
Now, let me be clear here. I am not talking about a super app like WeChat and Alipay in China. Those companies offer just about everything within an app, from buying groceries, booking travel, ride-hailing, as well as every type of financial offering you could think of.
Some people have said that America is not a place to embrace super apps. And that is likely true if we think about the China model where these super apps are more like complete ecosystems akin to the iOS or Android operating system.
But I believe there is a real opportunity for a leading fintech (or bank) to develop a super app for finance. As I have already said, many have started on this journey.
Which brings up the essential question: what should be included in a finance super app?
Given the recent advancements in open banking and embedded finance, we have the technology to create a really compelling super app.
Here are 20 things I would like to see included:
- Digital bank account with debit card – all the standard offerings available today.
- High yield savings account – high yield means keeping pace with the Fed Funds Rate.
- Peer to peer payments – be able to interface with multiple p2p payment networks.
- Set savings goals – with separate buckets to park this cash.
- Buy Now Pay Later – integrated BNPL functionality.
- Shopping – this could be integrated with BNPL but should include most popular stores.
- Loyalty programs – there should be a central place to manage these.
- Instant transfers to outside bank accounts – why is this not standard already?
- Consumer loans – the super app will have enough data to offer instant loan approvals.
- Credit cards – offer a selection of rewards and no fee cards.
- Overdraft protection – no overdraft fees and the ability to access up to $100 instantly.
- Stock trading – this is no longer optional for a serious finance app.
- Crypto trading – should be able to buy and sell the major crypto tokens.
- Debt management – Help consumers manage all their debt for optimal interest savings.
- Earned Wage Access – access part of your paycheck early to pay for emergency expenses.
- Credit building and monitoring – provide a pathway to building a credit score.
- On-ramp to DeFi – this is likely some time away but I think it will be required of a finance super app in the future
- Connect outside investments – the super app must be able to see all/most of your investment accounts.
- Open banking connections – see all the places where your bank account info has been shared.
- See complete financial picture – dashboard with KPIs to give you a clear picture of net worth and how your financial life is trending.
This last point is particularly interesting to me. Most businesses today measure a range of key performance indicators, and many of the small business apps have useful dashboards that show the business’s health at a glance. But we don’t really have an equivalent concept for consumer finance key performance indicators beyond a credit score.
I would like to see the finance super app provide more financial intelligence. It should answer how many weeks or months we can cover with our savings, how our free cash flow is trending, total investment returns (if any), how our debt burden is trending, and more.
Who is closest to developing the finance super app?
We are still far away from any company coming close to the functionality I described above.
PayPal is probably closest, but they only have around half of the features I would like to see. SoFi, fresh off hosting the Superbowl in their shiny new stadium, has potential as they have probably the broadest offerings of the new breed of fintechs.
Chime, the largest digital bank in the U.S., has a long way to go with a limited feature set to date.
MoneyLion is also a company I am watching closely as they keep adding new features regularly.
In Europe, Revolut has the broadest set of features, so we don’t want to count them out here.
Digging deeper into the finance super app
FT Partners released an excellent report titled The Race to the Super App earlier this month. It suggests two different models or avenues to a finance super app.
For my vision of the super app, only one of their models makes sense but what I liked about this report is that it delves into the offerings of every significant fintech in the space.
We are going to have many finance super apps eventually. I don’t think this is a winner takes all category. There are likely to be 2-3 companies that get serious traction and several others with enough customers to make their business profitable.
I also think the fintech companies will be able to charge for this service. A subset of features should be free to encourage mass adoption, but a complete feature set could be so valuable that a monthly fee will be viable.
One final note. One company does not need to build all this functionality in-house. There could be partnerships where a third party provides the processes, but it resides inside the super app from a user perspective. With this in mind, it could well be a bank that creates the ultimate finance super app in the long run. But as of today, fintechs have the lead. The race is on.
