What would a financial super app look like?
What can Jetsons tell us about the future of finance?
If you wanted to know what the future looked like before it even happened, all you’d have to do is look at the Jetsons.
The Jetsons poster
Remember them? The cartoon series, first aired in 1962, predicted the technology of the 21st century, long before the end of the 20th. And most of those predictions are already here.
Moving walkways, video calls, robotic assistants, flat-screen TVs, smartwatches, and the internet, are all the things the Jetsons had in the 1960s. In 1962, those things were unimaginable as a part of our daily lives; colour TVs, for instance, were not produced and sold en masse until the later part of the 1960s - so the idea that a robot vacuum cleaner could even exist was inconceivable. It goes to show that the world has always been rushing to automate.
The world has been rushing to save time.
An occupational hazard in my line of work is one single line of questioning -
What is the future of banking?
And it comes up so often that it changes contextually, almost every single time. But the core idea is always this - solve for time, solve for accessibility. And building on the idea then means making money autonomous. Self-driving money.
Self-driving money is fintech’s holy grail - software that automates and seamlessly optimizes your finances across categories. Think of it as a digital assistant, or even having your own CFO, whose main job is to optimize for and find the best path of financial abundance for you, and is relentless in pursuit.
And as tempting as it is to compare self-driving money to self-driving cars, I’ll resist.
Source: Quartz
Look at this consumer comfort survey from credit Klarna - people are more comfortable with autonomous financial advice than they are with self-driving cars. So that’s not a fair comparison.
But here’s the thing, self-driving money isn’t all that radical. Neither is self-driving cars. It’s a fairly rational extension of human evolution, I’d think. Wealthy people have always enjoyed an autonomous lifestyle - think chauffeur-driven cars and specialized financial advice.
So really then, the future of banking or the future of technology itself isn’t as exciting as the future of accessibility. The exciting bit then, is how imaginative technology can be to reach the underbanked, enough to ensure they can also save some cash to buy that self-driving car.
Accessibility vs automation
Accessibility means different things depending on who you’re asking.
If I ask what my young team at FinBox wants out of a bank, the answer I’d get is convenience. The team mostly consists of young millennials and GenZ - a generation of people who’ve never stepped foot into a bank, a generation that wants to order everything online. The generation that wants everything to drive itself.
Obviously, this is by choice, this is their privilege. There’s also an entire generation of people who’ve never stepped foot into a bank, that’s not by choice, that is their handicap. They’re underbanked and my guess is, they’d also want everything to drive itself.
But there’s one common link here - most of them use apps like PhonePe or Google Pay for everyday transactions. My colleague Anna writes in her piece on the QR code revolution
“A whole ecosystem has evolved around UPI and QR Codes are at the heart of it. The rise of QR codes in the last couple of years is unprecedented. In fact, QR codes aren’t just popular but becoming inescapable. Mint did a story on how even beggars in India’s poorest state Bihar have caught up with the digital financial revolution. Interestingly, for one beggar, alms collections doubled to ₹300 a day after switching to QR codes — that is roughly $4 more than the average daily wage for a farm labourer in Bihar. Well, UPI QR codes have made even almsgiving seamless.”
That’s the QR code-driven super app revolution for you.
When most people hear the term super app, they think of Chinese mega-app WeChat. With over 1 billion users, it has become the de facto official app in China. What started as just a messaging app, now lets people pay at restaurants, book train and plane travel, hail cars, and buy movie tickets. Look at GoJek, Indonesia’s ride-hailing app that’s now a super app. It can be used for food delivery, P2P payments, groceries, scheduling house cleaning and everything in between.
Unlike mono applications that offer one function in the most convenient and understandable format, super apps build an ecosystem capable of providing a solution for different consumer needs as an organic user flow. The backbone of that sort of contextualizing is data.
Revolution comes knocking at the doors of banking
Revolut is actively scaling its banking ecosystem by adding new features and products, including those provided by third-party institutions. There’s also the Russian Tinkoff Bank, which along with financial products, is a marketplace of goods and services; it has a healthcare support system, with the ability to choose a doctor, lifestyle services like travel, restaurants, and even events from third party providers. It runs on the rails of machine learning to select products specifically based on the needs of a user.
Super apps are successful on the back of the hidden utility of time. So, if I were to design a super-app I’d consider these things -
The core task of personalisation would mean - informing the users about finances that need attention, recommendations for improving financial health, making forecasts and offering products based on specific needs and goals
Biometrics would play a big role (TouchID or FaceID/ VoiceID). That would ensure seamless authorisation, especially for users who aren’t literate. And especially also for the digital natives, who’re always in a hurry. Instant access while maintaining an adequate level of security.
A dashboard to see the user’s financial health - across bank accounts, challenger credit cards, and crypto-wallets. A convenient and intuitive way to quickly switch between accounts via a simple swipe and a chart that shows money movement across accounts/channels.
The same chart reveals paid, unpaid and scheduled bills, as well as budget levels. Another simple swipe to expose the best possible scenario for improving finances.
Tooltips/voice assistance in vernacular languages for real financial inclusion. Video tutorials at every corner to onboard new-to-technology customers.
A financial activity feed inspired by social media - A dashboard to review all transaction information, suggestions from friends, system recommendations, and notifications all in one clear and simple format that's reminiscent of Instagram. A with friends’/social activity and recommendations on the best products/services
These recommendations can include tips to reduce spending, location-based alerts on the nearest ATM, reminders to pay bills, investment recommendations, mindfulness alerts when shopping
A button to instantly report suspicious activity
A Yes/No notification to pay recurring bills/subscriptions
A voice-based assistant to do anything and everything. “Send Rs 5000 to x”, “I want a personal loan”, “What’s my balance”, etc. While this already exists, to make it more intuitive, imagine a scenario where the AI assistant has already prepared and approved proposals for the maximum number of services using predictive analytics. All the user has to do when he/she wants a loan is to tap on the mic, ask for a loan and hit confirm. All under a couple of minutes.
A smartcard for the underbanked. For the millions of people who still use feature phones, an app is unheard of. How can banks serve these customers? Imagine a card, with customized taps for basic functions like money transfer and availing credit. The data needed to underwrite these customers can come from offline sources - everything from Kirana stores to social activity among peers.
This list is already pretty long and a product roadmap would become unwieldy in all probability. This is exactly the challenge of bundling financial services - a constant battle between keeping it simple and making it useful.
Principally speaking
WeChat’s average revenue per user (ARPU) is estimated to be at least $7 — that’s 7 times the ARPU of WhatsApp, the largest messaging platform in the world.
Back in 2011, when WeChat launched, China had low email penetration; texting and voice plans were expensive, and SMS spam was prevalent. Credit card penetration was rather low too.
I keep bringing up Wechat because our economy bears similarities to China. We have a large underbanked population with low credit penetration too.
There’s a lesson or two to be learned from the world’s fintech laboratory and it almost always circles back to the hidden utility of time. Like, look at Ant Financial’s 3–1–0 and 2–1–2 principles -
Source: Medium
Ant Financial designed a 3-minute application process (KYC data comes from the super app), the 1-second disbursal and 0 manual back-office operations ( effectively replaced by Machine Learning and predictive analytics). Similarly, their 2-minute loan application, 1 -second auto review and 2-hour settlement are done algorithmically. This isn’t rocket science, especially for fintechs -
Customers’ spending/banking history can be parsed and analyzed in one platform
New technologies in risk modelling can reduce human error, risk and biases.
The world is always rushing to save time. And it makes sense when the highest value any business can offer its customers is time. But like always, I have more questions than answers so I’ll leave you with a question -
The future of banking is technology and it's already here. But how can banks work for a micro-enterprise in a village in far-flung corners of the country? And ensure that the business has the same accessibility to credit, investment, and financial advice as the next person with a smartphone.
What does solving for accessibility mean? Does it hang on the hope that every single Indian will eventually have a smartphone and is magically tech-savvy? Or does the plan involve financial literacy agents, bank technology agents whose primary job is to plan for every non-smartphone user’s financial abundance?
The last few years have given us several macro trends — pandemic-fueled boredom driving interest in financial speculation, low-interest rates, strong but volatile performance for stocks and crypto, rising inflation, — all making self-driving money look less appealing. So, do financial super apps, based on the idea of self-driving money, make sense?
Is this the future that Jetsons forgot to predict?
I will see you next week!
Cheers,
Rajat