I have worked in Financial Services for over 20 years. Spoken to thousands of clients. Written masses of mailshots and marketing campaigns around the importance of managing your finances and making use of various tax shelters. But still, when it comes to my own finances, I can be a bit lazy, everything is last minute, mañana. I bury my head in the sand and don't come up for air. I know I am not alone. I’ve spoken with clients at 11:59pm on the last day of the tax year calling from a party to make their ISA contribution. Sure it’s a great anecdote for them, but is that really how managing finances should be in the digital age? Where’s the automation, the personalisation? Who is building that simple financial concierge service of the future for those that bury their head in the sand like me?
In the UK, there have been a few attempts to bring individuals’ finances together in one place and make them easier to manage. Starling, with their marketplace, which includes a link through to Pensionbee with the end goal being to consolidate your pensions with…. Pensionbee. I can also see my Pensionbee balance through the Starling app. Fair enough. It’s a start I guess.
Monzo has had a go too. They offer a switching service for your energy provider. With a few clicks you can compare the current deal you are on and make a switch. Again, it’s a start. But as I said, I am lazy.
When I recently purchased a new phone and transferred all my data, I got a ping from Revolut asking whether I would like insurance for my new phone. Amazing. When I go near an airport Revolut knows and pings me offers for travel insurance. Do I care who the insurance is with? Not one bit. And that’s going to be a challenge for some companies who spend a fortune building strong brands for consumers to ‘identify’ with. If one company becomes the gateway into someone's finances those that provide the service underneath are essentially anonymous.
Enter the super-app...
Unlike traditional single-purpose banking apps, which have dominated the market over the last ten years, super-apps cover multiple verticals and create a “one-stop-shop” app where users can complete many different tasks. Super-apps combine an array of different services into one app. In the Far East the two most popular of these apps are Alipay and WeChat. They host over 2 billion users combined. These super-apps do almost everything - from buying a pizza, hailing a taxi, chatting to your friends and even booking a massage. But in the West few companies are coming out to play. The opportunity is huge, 1 billion commercial transactions occur every day on WeChat Pay. WeChat Pay has 72 million registered businesses. 35% of WeChat users spend more than 4 hours on the app every day, compared to Gen Z users spending 53 minutes per day on Instagram. The average individual has around 80 apps on their phone. That’s a lot of apps – and a lot of app fatigue. It’s not surprising that so few consumers download new apps. The super-app becomes the front door for how consumers interact with and purchase goods and services as they go about their everyday activities.
In the UK, Revolut is still probably the furthest ahead on this journey and already calls itself a super-app, providing banking, investing, currency transfer (users are able to hold and exchange 29 currencies and withdraw over 130 currencies) and other money management services to some 16 million users globally. A 25% jump from 2020. In July 2021 Revolut raised a further $800 million. The plan will be to bring on a wider range of services and promotions both to grow that base and to get its users putting more money and time into the app.
According to Scott Galloway, Professor of Marketing at NYU Stern School of Business where he teaches Brand Strategy and Digital Marketing, big tech has a vested interest in super-apps and could be the reason why we don't have a hands down super-app in the West, yet. He believes "Apple and Google are in the business ensuring that nobody develop super-app. Apple does it by putting out their elbows and charging a 30% fee to any app in their app store. Google does it by forcing the online work to pay a toll in the form of ads. So they have a vested interest in not letting any one player steal attention or time from them".
When companies here talk about being the ‘one stop shop’ or ‘financial dashboard’ that is ever increasing going to have to be a unified operating system to command more of your attention per day. Personally, I want automated services that move my money with minimal interaction from me, the user. I don't care where my insurance is. I don't want cash sat idle. I want it moved automatically and all tax shelters filled without the need to call from a party at 11:59 on the last day of the tax year. And I want it all done through one app.
With the companies all vying for the user’s attention, those that can capture a multitude of services through that one app will typically become some of the most valuable companies in that ecosystem.