By Prabhakar Tiwari, Chief Growth Officer, Angel One Ltd
Many consumers in India use several existing or potential super-apps without realising the wide range of services offered via such applications. Multiple examples of apps operate as a super set of different services. For instance, one could manage a credit card from a food delivery app, and it is possible to book air tickets from a conventionally digital payment app. Existing and popular applications have slowly transformed themselves into super-apps.
The public response towards these super-apps is mainly positive, resulting in an expected CAGR of close to 24% in the next five years. The entire industry’s size is expected to reach $800 billion by the end of this decade. Such an unprecedented size shall be created with the disruptions caused by these applications in different sectors, including financial services.
The financial landscape is expected to witness significant developments with the super apps rise.
Here are some of the major effects:
Impact on the banking sector
One of the most significant advantages of super-apps is their ability to integrate a wide range of financial and banking services within the platforms to provide customers with a seamless experience. For the banking sector, it implies that many users may bypass the banking apps and use more integrated super-app.
For instance, a leading food delivery company’s Edition Card (in association with a famous commercial bank) facilitates users to bypass traditional banking channels and operate/monitor all banking activities through the super-app. In addition, Super-apps with digital wallets make it easier for users to stay in the ecosystem and reduce their dependence on cash and credit cards.
Impact on financial services
Another critical impact of integration shall be felt in the brokerage, investment, and asset management sectors. Through the super apps, users can evaluate their creditworthiness and net worth. Furthermore, such super-apps provide an opportunity to monitor real-time movements in existing investments. Users can also create a watchlist based on which market ups and downs can be analysed.
For example, a super-app in India helps users invest in mutual funds and equities, provides access to US markets and offers AI-backed recommendations, among several other features. The investment and asset management process has become better than ever because of the development.
Impact on the insurance sector
One of the most significant issues with the insurance sector conventionally included the cumbersome paperwork and onboarding process. Life and general insurance have been integrated within digital payment apps, based on which the time and effort undertaken to complete the insurance onboarding process has drastically improved. It means that the total coverage of insurance shall increase. For instance, currently, around 41% of households in India have at least one person covered by a health insurance policy, which is quite a poor figure based on the size of the Indian population. With the advent of super-apps, this situation can change considerably.
Summing up
Super apps essentially act as a single portal to a wide range of products and services. There are more sophisticated, integrated, and widespread super-apps in China and the US compared to the Indian market, which is still evolving in this context. However, several such applications have already shown a sign of brilliance in execution and integrating a different range of services. With the gradual adoption of these apps, it is anticipated that the financial landscape will be more inclusive. Newer products and services will reach remote areas easily and at a faster pace.