The global super app market was valued at $58.6bn in 2022 and is projected to grow at a 28.9% CAGR to reach a $722.4bn valuation by 2030. Having originated in Asia, super apps are now becoming popular around the world. A report from PYMNTS and PayPal surveyed consumers in the US, UK, Germany and Australia, found that 72% of consumers expressed interest in super apps – UK consumers were the most interested with 74% indicating interest.
However, while consumers in other continents might have a desire for the one-stop-shop app, it might not be a possible reality. Nick Maynard, VP of FinTech Market Research at Juniper Research, said, “The success of the Asian super apps has created an expectation that this kind of proposition can translate into other markets, although we believe the market is realising that this is an unrealistic prospect in some markets, with issues such as privacy and customer preferences playing a role.”
In a similar vein, Fredrik Davéus, founder and CEO of Swedish financial analytics API developer Kidbrooke, said, “I’m not sure I think super apps will happen in the “old” developed markets, i.e., US and EU. There is already more diversity in apps and competition and competition regs are hard to overcome when creating a super app. Also, I’m not sure customers will be satisfied with convenience over state-of-the-art functionality.” He added that it is also tough to see one provider being capable of being best of breed in all areas and aspects.
Tamara Kostova, CEO of a WealtTech company Velexa, had a similar mindset about the prospect of super apps in the West. “The reason for the original super app – WeChat was actually more of a technical aspect having to do with bandwidth and storage. Asia has seen convergence in their social media platforms with super apps specific to different countries (WeChat in China, Tata Neu in India and Grab in Southeast Asia) while the West has seen divergence in their social media (WhatsApp, Facebook, Instagram, TikTok, LinkedIn etc). Even though some have tried to launch competing features (such as Threads by Instagram to compete with Twitter), most of them have failed due to the stickiness in existing platforms. Therefore, it will most likely be extremely difficult to create super apps in developed countries.”
Super apps might not make their way to Western markets, but they have still influenced the global FinTech market. Radomir Mastalerz – the co-founder and CEO of award-winning, easy-to-use, and affordable wealth management platform WealthArc, explained that apps like WeChat and Alipay have demonstrated how an app that can go from offering a single service like messaging or payments and offer a wide range of financial services – something that has inspired many companies around the world.
Due to this, several Western tech giants and FinTech companies have tried to replicate the super app model. For example, Elon Musk is hoping to transform X (formerly Twitter) into a super app. Prior to his acquisition of the platform he tweeted, “Buying Twitter is an accelerant to creating X, the everything app” In a later post, Musk outlined his desire to bolster the platform with comprehensive communications and the ability for a user to conduct their entire financial world.
There are other household names that are looking to diversify their apps to offer a variety of services, including Klarna, Uber and Lydia. However, Mastalerz doesn’t think the super app road is perfect. He said, “While the super app approach can offer convenience and efficiency to users, it also raises concerns about data privacy, competition, and market concentration. Whether it’s a good thing depends on how well these platforms address these issues and provide value to users.”
Super apps within WealthTech
Despite uncertainty around their success in the West, companies are keen to explore opportunities. The question is, how can WealthTech companies fit in to these services? WealthArc’s Mastalerz stated that “Super apps can integrate WealthTech services such as, robo-advisors, portfolio management and financial planning tools, to offer users a complete suite of financial solutions.”
He continued to outline several pros and cons the super apps could have to the WealthTech landscape. The pros included convenience for consumers to manage their wealth, broader access to investing and access to personalised investment recommendations. As for the cons, this included a risk to data privacy, complex regulations needed to navigate and a less diverse landscape. The latter was echoed by Kidbrooke’s Davéus, who said, “Most likely it will mean a single or very few winners take it all and all other apps will slowly die.”
Velexa’s Kostova believes that if a super app wants to start offering investing services, it relies on trust. People are not willing to just hand over their money and giving a company control over your finance requires a lot of trust, so working with a WealthTech that has a great track record can ease the worries of a user. Kostova said, “The concept of embedded trust is very important here – if a user trusts an app already for the variety of other services, it is much easier to incrementally sell them an investing service. Investing can be quite daunting for nascent investors, but if they have found other experiences easy on the App, they will be more encouraged to explore.”
Maynard added, “Super apps will potentially provide WealthTechs with a new distribution method, tying them into a wider ecosystem of potential users. This can help with new user acquisition, and in appealing to markets that haven’t been central to company strategies before. However, this does come with risk. Under super app models, revenue is often shared between the third party service and the super app, meaning that the WealthTech will gain less than if they acquired the user themselves. There is also the risk that by not creating a more direct relationship with the user, services will be less sticky and there will be more churn.”
Do wealth managers need to adapt?
If super apps do manage to make their presence felt in Europe or the US, it begs the question of how wealth management firms should respond and whether they need to adjust their digital strategies to compete.
Mastalerz said, “Wealth management firms may need to adjust their digital strategies to stay competitive or complement super apps. This may involve partnerships or integrations with super apps, focusing on niche markets or specialized services, or enhancing their own digital offerings to provide a seamless user experience.”
Mastalerz is confident that wealth management firms can leverage the convenience offered by super apps, without needing to compromise their specialised services. To do this they can provide financial education to all users of super apps, offer personalised financial advice by training AI models on the vast amounts of data collected by super apps, and supply hyper-personalized financial advice outside of super apps for users with special needs.
Velexa’s Kostova, noted that the best route firms can take is a hybrid one. “A hybrid approach can help wealth management firms maintain their white glove service even nestled within a super app. In the same way that Health super app DoctorAnywhere has been able to provide high touch consultations with doctors and psychologists with their multi-functional app, a wealth advisor or manager could still have one-on-one time with clients and be on-demand.”
However, the traditional financial service providers might already be serving as a version of a super app. Kidbrooke’s Davéus said, “Many are already turning to B2B and providing the large retail banks with functionality. In a way you can look at the large retail banks as “financial super apps” especially in markets where there is an oligopoly situation such as the Nordics.”
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