By Michael Sprachman, VP of Brokerage Trading Platform, Devexperts
SuperApps may not yet be a common concept in the U.S. – as opposed to the APAC region where they more widely used – but increasingly, multi-function apps within financial services are catering to the consumer and investor markets.
A SuperApp is a single mobile app that houses an ecosystem of services. WeChat, one of Asia’s most popular apps for example, covers standard messaging and social media, but also offers calendars, reservations, food delivery, car service booking, maps and directions, money transfers and payments, health services and shopping. Think everything a person would need for a night out on the town without even hitting the home button.
And while not SuperApp status, some well-known comparisons in the U.S. include Uber, which started as ride-hail service and now boasts restaurant and grocery delivery, car rental, a full online travel agency, and alternative public transportation. Facebook also has added Marketplace for shopping, dating functionality, gaming and is famously looking at how to integrate the Metaverse.
And last month, it was reported that Twitter is planning a Twitter payments structure, with the vision of making Twitter an “everything app,” according to news reports.
Increasingly, financial institutions and investment service providers are using this concept too, as a way to expand their offerings and increase market share. – thanks to advances in technology, which has lowered the barriers to entry. Historically, for example, a retail bank might launch or acquire through M&A a brokerage at significant capital expense. However, the barrier to entry is significantly lowered thanks to advances in technology which has led to more diversified service offerings.
In the investing universe, Robinhood gained notoriety as an online trading platform, offering even the most novice of investor the opportunity to trade in the stock market. Today though, the company has diversified the services it offers through mobile with a “spending account” and IRA services – without a costly acquisition.
The rise of multi-function apps correlates to the rise in mobile usage. Last year, the average time spent on mobile devices increased 2.5% year-over-year (YoY) to over 4.5 hours per day, according to Insider Intelligence.
However, this begs the question, technology may have enabled these bundled services, but is that what investors really want: Do they want the ability to do 10 things in one app or do they want a specialized interaction for 10 services?
The answer may not be so black and white, given the different generations of investors in the market and how they want to interreact with technology. Regardless of approach, for the next generation of SuperApps, the key factor in development will be identifying harmonized business lines.
With the case of WeChat, being able to plan a full night out with friends, sync calendars, and share photos is a valid use case. But there is no need to be able to order delivery for dinner and place a stock trade in the same app.
Rather, when looking at the future of SuperApps for financial services, Charles Schwab’s mobile strategy may give us the best indication of what is to come. In 2020, Schwab acquired TD Ameritrade and announced plans to integrate the thinkorswim and thinkpipes trading platforms into their service offering for clients of both firms. From a mobile perspective, this may translate into a SuperApp offering advanced trading and education tools, plus their current brokerage, retirement, banking, and borrowing services. Alternatively, Schwab may offer multiple apps, a multi-function covering their harmonized services within the new Schwab umbrella, and one with their advanced trading platform tools.
While a SuperApp may not take hold in the financial services space, the multi-function app is here to stay and continued user demand for specialized tools in investment services is keeping the need for single service apps alive, for now.
