Super Apps is a term you may not be familiar with if you’re from Europe or the US, but if you reside in Asia, there’s a good chance you spend most of your screen time using one.
But what exactly are they, and how are they shaping the future of the fintech industry?
Super Apps: multi-service marketplaces
Essentially, Super Apps are digital applications that offer a wide variety of services: users can talk with friends, order food, or book a flight – all within one app, and without having to switch to any others. The app becomes a multifaceted marketplace, rather than a single service offering. In the East, WeChat – China’s equivalent to Facebook with over a billion users around the world – is a prime example.
But the concept of a multi-service offering is not a new one. Take the media and tech industry as an example: Google began as a search engine, but now offers email, YouTube, home security, cameras, drones, and phones. Facebook started as a social network and has acquired its way to photo apps (Instagram), messaging (WhatsApp), and virtual reality (Oculus.) Even TikTok, a relatively new video platform that caught the world’s imagination during lockdown is now offering e-commerce capabilities to brands to reach its audience of over one billion users.
The next frontier for fintech
By comparison, fintech is a late-blooming industry. App-based finance was a relative latecomer to digitisation, with a significant level of mistrust for digital banking and an ingrained loyalty to long-established traditional banks, with face-to-face appointments preferred.
However, there are signs that the Coronavirus pandemic has accelerated the shift towards digitisation. A recent YouGov survey revealed that two-thirds of consumers said they’ll use digital service channels wherever possible and that concerns of managing finances online have fallen away: in the US, a majority (57%) think it’s safe to do so, while in Great Britain, which has a well-respected fintech scene, this rises to more than seven in ten consumers (74%).
This recent shift has primed the fintech landscape to offer an expansion of their services, and start-ups are now desperately competing to build out their product suite to meet increasing consumer demand. They start with their core offering – like banking accounts (Starling), international payments (Wise), or pensions (Nutmeg). They then add related products that strengthen their offering; Revolut started with low-cost FX and international payments, before adding business banking, crypto trading, travel insurance, physical gold investments, and an accommodation booking service. Meanwhile, Starling has announced its first acquisition as it pushes into the mortgage sector.
Racing to expand coverage and products
This generation of app users wants everything ideally in one place, with minimal friction – and at the same time, are more focused on their personal finance than ever before. The same YouGov survey looked at Starling and Revolut – two major challengers in the sector – and found that at least half of their customers (Starling 54%: Revolut 50%) are aged 18-34, compared to just over a third (35%) of the general UK population. The competition for users’ attention is cut-throat, and many start-ups will fade away as consumers only need so many of them.
So, fintech Super Apps must focus on geographic spread as well as product breadth. The UK – or even Europe – is no longer big enough for a start-up’s aspirations. This quest for global domination further impacts the need for deeper product depth; culturally, Canadians care about the investment value of gold, while people from the UK don’t. People in India don’t tend to buy shares, and so on. Fintechs – and Super Apps – need to cater to everybody, everywhere, so that they can successfully launch in new regions and be all things to all people.
Going for gold
As fintechs look to expand their global reach and product depth, sooner or later they will need to offer alternative wealth and investment products, so it’s only a matter of time until they look to allocated gold. The recent implementation of Basel III pushes the industry towards physical gold over paper, and demand for the precious metal has increased by 40% from 2019 to 2020. In London alone, £4.5 billion worth of gold is traded every day.
That’s why Goldex, a UK fintech start-up, has pivoted to B2B and the response from the sector has been overwhelming. As a multi-dealer marketplace, it recently launched a bespoke trading integration for financial companies. Through a plug-and-play connection over API or FIX, apps like Revolut and Starling – or any other fintechs with Super App aspirations – can offer their customers access to best pricing on physical gold 24 hours a day, seven days a week.
‘B2C fintechs are racing to build their product suites; it’s a game of survival of the fittest,’ Sylvia Carrasco, CEO of Goldex explained. ‘Companies are looking for geographical domination and expansion of their product offering. Lose the game, and their users will flip over to the next platform. Goldex’s pivot to B2B integrations enables it to capitalise on huge demand for allocated gold from fintech and operators of embedded finance.’
Goldex is already working with 20 fintechs directly to become the most convenient option for allocated gold, creating a product that, so far, has no direct competition. Matching a fintech’s pace of ambition, apps can offer their users allocated gold within six weeks.
So as the US and Europe move increasingly toward the Super App model, it’s likely that more companies will consider how they can integrate several services together, rather than focusing on specialisation of one product. In order to tap into the full potential of global growth, services like Goldex’s B2B integration product could shape the future of the fintech industry.
Unlock the world of allocated physical gold for your customers with Goldex. Through an easy API or FIX integration with the Goldex marketplace, your customers can buy and sell physical gold in a matter of weeks.
Find out more about Goldex for Business.
Important disclaimer: this document is not an official research report and the views expressed in it are those of the authors. The authors are not registered research analysts and there is no assurance the trends mentioned will continue or that the forecasts discussed will be realised. Gold as a commodity is not a specified investment for the purpose of giving advice under the Financial Services and Markets Act 2000, therefore, this does not give rise to rights to claim compensation under the Financial Services Compensation Scheme.