The emergence of the super app
How this technology tool is encouraging financial inclusion
8 Nov 2019 | Darryl Yu

ONCE viewed as one trick ponies mobile apps are slowly evolving outside of their core competencies with the objective of giving the user a seamless experience. From ride-hailing apps to e-wallets, app developers want users to spend more time on their platform. While still in its developmental stage in many jurisdictions the idea of a “super app” or a single portal access for various services or products has already been prevalent in China for some time. The likes of WeChat and Alipay, for instance, have deepened the interaction with their respective userbases extending to areas such as financial services including lending and investing. 

While these super apps offer the average user an array of functionalities they have the potential to impact one of the pressing issues facing the Asia-Pacific region – financial inclusion. Traditionally neglected by the banking system due to lack of funds and riskiness, this unbanked segment of society is seen as a natural target market for super apps with financial services aspirations due to their already large userbases.

More importantly, super apps are seen as perhaps having an edge over their traditional banking peers due to the higher level of insight they have over a particular user’s behaviour. “Super apps are using their data to improve operational processes - like using social media and transactional data to risk-assess loan applicants, and they are using their data to better target financial products to customers, at the exact time they need them. Traditional banks, with their siloed data and mainframe technology estates, are struggling to get as good a view of their customers,” states a recent KPMG research note on super apps.

It's something apps outside of China are looking to implement as they grow their businesses. Speaking at this year’s Hong Kong Fintech Week, Huey Tyng Ooi, regional managing director at GrabPay shared her company’s goal to help the unbanked. “We would like to have social impact on the microentrepreneurs and the unbanked and to give them a chance to participate in the digital economy,” she says. Originally a Southeast Asia focused ride-haling app the company has grown and now offers drivers and users basic financial services including lending. “With the data of the drivers we are able to access the creditworthiness of these drivers before they even apply for the loan - all our drivers are pre-qualified in advance,” shares Ooi.

Though a welcome relief for many unbanked people in Asia, the rise of the super app in financial services is something banks need to keep on eye as this may lead to customer attrition. “Banks will need to decide soon whether they plan to be a front-office player within a super app, a back-office enabler or simply a piece of regulated infrastructure in the future — and then start investing and evolving towards achieving that vision,” notes KPMG.

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