In The Connected Economy’s Power Source – CEO Edition, Angus McDonald, co-founder and CEO of Cover Genius, explores how “super apps” could be key to protecting consumers in the new, digital-first economy. “Consumers’ desire for point-of-sale protection will be at an all-time high in a post-pandemic world,” he says. “With embedded insurance tied to super app activities, customers’ needs are better met, and an additional revenue stream opens up.”
Data sharing across financial institutions is opening doors that seemed iron-clad just a few years ago. Thanks to legislation around the world and technological innovation, FinTechs are extending their powerful brands and massive audiences and setting new standards for eCommerce’s customer experience and growth potential. The jury is out on whether banks can navigate the digital opportunities and impending disruption as a much more digitally centered universe emerges from a global pandemic.
Out of this shift will arise a bolder vision for American “super apps.” In a super app, customers can access an entire ecosystem of products and services. With their extended capabilities, super apps allow customers to purchase products, book appointments and access services — all within a single platform. While we all know about Facebook’s efforts to get Diem off the ground alongside Novi, Pay, Instagram Shopping and its rapid-growth Marketplace, we need to look internationally to get a glimpse of our American future.
We’ve seen WeChat’s dominance and Grab’s emergence, but industry folk are also closely observing decacorns across the globe. For example, Paytm, Flipkart and Ola in India; Klarna and Revolut in Europe; and Paypal, Chime, Affirm, Afterpay and Quadpay in the U.S. In Asia, Line, Kakao, Lazada and Shopee hold market share, while Ant dominates Chinese banks. And services like Rappi in LatAm and Careem in the Middle East are expanding well beyond ride-hailing and food delivery. Instead of developing an app where customers can simply ride, receive or pay, these companies are seeking to be a whole-of-life partner for customers’ day-to-day.
For customers, super apps offer cohesion and seamlessness, and are able to collect behavioral data. The end result is an incredibly personalized and profitable experience for customers and brands alike: Super apps can leverage insights to send relevant offers and build new services. Providing protection is a big part of that, and rising super apps can provide greater value by building seamless integrations of warranties and insurance, powered by customer insights and APIs. In doing so, they build loyalty, engagement and share of wallet.
Consumers’ desire for point-of-sale protection will be at an all-time high in a post-pandemic world. With embedded insurance tied to super app activities, customers’ needs are better met, and an additional revenue stream opens up. Big Retail has recognized this: Walmart is building a super app for end-to-end transactions, and Amazon’s moves into health insurance are well-documented, too.
So, what does this mean for banks that want to get in on the action and leverage their own customer data the same way the tech set has? Assuming they can relieve themselves of the pandemic impacted burdens of branch networks while leveraging the API economy to update their core banking software, there’s a great opportunity here to pivot from brick and mortar to high-engagement digital utilities centered around personal finance themes like literacy, life event planning and asset protection.
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