Everyone, including big tech and social media players, want a super app. That’s according to a 2022 Accenture Banking report, which underscores that the threat is real. The super app concept—a single user interface to house everything from shopping and transportation to bill pay and banking—provides an attractive consumer experience and an alternative to the practices of today.
For the super app creator, this solution stands to be highly lucrative, which explains why more than 30 global platforms either currently meet criteria to be considered a super app or are working toward it. Take PayPal alone, which launched its version in September 2021. As of Q1 2022, the company boasted 429 million active user accounts. Assuming reports of the average account balance of $485 are accurate, we’re talking about the potential for more than $200 billion to be held outside of the traditional banking infrastructure.
Clearly, we’re past the “wait-and-see” phase, and it’s time to act to retain our customers. Community banks must capitalize on their strengths to keep their customers engaged, specifically by:
- Emphasizing bank security. According to Mercator Advisory Group: “U.S. consumers cite security concerns as a top reason for not using a payment app, so convincing consumers to put more personal information under a single interface is likely unrealistic in the near term.” With data breaches at their highest levels ever, now is a good time to remind consumers of the benefits of keeping their money within a federally insured institution, which applies stringent safety protocols and adheres to the highest levels of regulatory compliance to safeguard consumer data.
- Offering payment choice. When it comes to current behaviors, customers still rely on their physical cards. In a Mercator Advisory Group survey of 3,000 consumers, 57 percent reported using a card inserted into a terminal, with another 26 percent waving or tapping their card at the terminal. The use of apps for payments continues to grow. So, creating opportunities where customers can choose between digital and physical offerings will help customers leverage payment technologies in their preferred manner.
- Doubling down on customer service. Your customers seek a relationship where they know they can come to a live person who they know with any concerns versus super apps, which have less than stellar customer support for issue resolution. Continuing to distinguish community banking from the faceless interactions of the super app also reinforces the value of your bank for servicing all their payment needs.
- Enhancing your app experience. You already provide access to banking information via your digital banking apps, so take the time to iteratively upgrade your offerings. Find out what your customers are looking for from your bank —financial wellness tracking, savings optimization, chat or voice features, or other needs—and get it on your roadmap. As Mercator sums up, “If investments are made to match the user experience, financial institutions could compete very well and weaken the current threat that these fintechs represent.”
The super app is just the latest iteration of banking competition, and in this case, community banks have a leg up. By identifying the right digital tools to augment your current relationship-banking model, you will meet your customers’ digital expectations and deepen their connection to you as a trusted partner.
