Banks, telecoms risk commoditization without super apps expansion

Banks and telecom companies face relegation to basic service providers unless they enhance their ecosystems.

Banks and telecom companies are at risk of being reduced to mere commoditized service providers if they do not invest in developing Super Apps, according to Roland Berger’s latest report, “Impact of Super Apps”.

“Almost all banks and telecom operators currently offer apps for digital banking, payments, self-care, etc. They have strong customer ownership and a place on their customers' home screens, but these apps are limited in functionality, offering mainly the core services of the bank or the telco,” Mohit Gidwani, Partner for TMT Southeast Asia at Roland Berger said.

Gidwani emphasised the significant opportunity for these apps to evolve. “There's a clear opportunity for these apps to be much more, to offer a wider set of products and services, and to create a strong positive impact on the service providers' customer relationship,” he said. “Banks and telcos can integrate retail services such as tickets, reservations, vouchers, e-commerce, entertainment digital services, linking these to a core payment functionality that most of these apps already have.”

The integration of diverse services not only enhances customer engagement but also provides valuable transactional data. Gidwani noted that super apps can be a competitive space, but banks and telcos have strong customer ownership.

“A well-designed, well-implemented Super App is a charm to use. It has smooth payment flows, a curated variety of services, partnerships, deals, benefits, even an element of discovery for the customer at times, no hidden charges, quick, light usage,” he said. “These features make users come back to any app again and again.”

The benefits of Super Apps on customer loyalty are twofold. “First, increased satisfaction and engagement with the service provider leads to an organic increase over time in loyalty and retention,” Gidwani explained. “Second, through the transaction value and usage patterns analysis, the service provider can create tailored offers and benefits for the customers, actively generating customer loyalty and retention.”

However, Gidwani cautions about potential pitfalls. “A wider variety of services and a big portfolio create a wider possibility of things going wrong. Therefore, partnerships with third-party service providers and payment gateways need to be very, very carefully managed to deliver a strong customer experience.”