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How not to design a financial 'super app'

A major trend within the financial services industry is the rush to consolidate users’ finances into one nifty streamlined app. The all-in-one “super app,” which would allow users to access all their finances in one place, has venture capitalists buzzing. To wit, Revolut was just valued at $33 billion. PayPal and Walmart are also jumping on the super app bandwagon.

But is this the beginning of a bubble?

While super apps such as WeChat and Alipay have been successful in Asia, their expansion in the U.S. and European Union is a more recent phenomenon. Driving this revolution is a singular focus on growth. Venture capitalists prioritize key performance indicators that focus on customer acquisition, leading firms to offer more bells and whistles served up through a single centralized app. While this may be a successful short-term strategy, companies will need to understand their customers, their social worlds, and their relationship to money if they want to make these apps work in the long term. People don’t think of their money as all the same. They distinguish between “fast money” — funds spent now — and "slow money" — funds set aside for the future.

Yet many super apps out there fly in the face of this finding. They prioritize people’s desire for convenience — a "one-stop shop" for money — but this is directly at odds with customers’ craving for control. Especially when it comes to finances, customers derive a sense of comfort and satisfaction from organizing their money their way. Whether by saving funds in separate envelopes, opening different accounts for different purposes, or creating elaborate budgets, customers want to be involved in how their money is organized. This is especially true for slow money. Customers intentionally set these funds apart, to reduce the temptation to dip into savings for impulsive purchases.

In other words, customers don’t think of all their money as being all the same. So, the customer experience around all financial products shouldn’t be either.

For fast money, customers seek convenience. This type of money often involves low-stakes decisions repeated frequently, so the user experience people want is something simple and easy.

Conversely, customers tend to experience slow money decisions as relatively high stakes. Consider the last time you adjusted your retirement plan or moved money into stocks and had the flickering thought that you were about to make a huge mistake. With slow money decisions, the accrued consequences over the long-term can be major: sell a few funds here, miss out on big returns there; start saving a bit later and end up $200,000 poorer in retirement.

Slow money decisions are also made infrequently, so people want more priming to reacquaint themselves with the subject matter: What is an IRA again? They are rarely made under pressure, so customers both tolerate and even hunger for time to think through their decisions and confer with others. Put another way, on user engagement, super apps should speed up fast money and slow down slow money.

A further hurdle for the super app relates to issues of privacy. While the pandemic accelerated adoption of digital services, the rise of the social media metaverse made people more wary of how their digital data is collected and used — with good reason. A 2017 Pew Research poll found that nearly half of all Americans feel their personal information is less secure than it was five years ago. So, customers are hesitant to share all their financial data with one provider. Older users may prefer to spread their money across many institutions in case one goes under. Customers of all ages worry about password hacking, often declining to link separate accounts, lest a security breach in one account endanger another. Trust is a holy grail of financial services, and data protection and privacy are both critical components of trust.

Money issues are also emotional, and we know that people don’t always make decisions rationally. This means that different groups of people will often feel and think differently about money. That means they will require different modes of engagement from providers. Yet too often providers, especially those offering a “one-stop shop” approach, design with a generic user in mind. In an effort to appeal to as many customers as possible, they cast a broad net so that the “target users” become consumers of ambiguous ages, income levels, and personal backgrounds.

Customers are not all alike. Nor is their relationship to money. The most successful players in financial services, we’ve found, often have a crystal-clear idea of who their customers are and what their needs are. They then design experiences that cater to these needs with such precision and care that competitors find it difficult, if not impossible, to outperform them.

Customers also don’t live, or make money decisions, in isolation. Like nearly every aspect of human life, money is social. Though they may have specialized roles, spouses still often consult each other on financial plans and decisions. Parents seek to pass on good financial practices to children. Extended families provide much-needed support, even in some cases splitting bills.

App designers need to be intentional about who they are designing for, not only what they are designing. The Asian super apps that succeeded did so because they managed to leverage deep-seated social networks. WeChat allows users to send frictionless payments to people in their contacts. Super apps must also tap into existing social worlds.

The super app certainly holds promise to revolutionize customers’ financial wellness while driving growth for financial firms and other companies jumping on the bandwagon. But long-term retention and loyalty will depend on getting the super-app right, not just building it quickly.

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