I remember reading in a banker publication at the end of the last century an interview with Dick Kovacevich, then chairman and CEO of Wells Fargo (or it still might have been Norwest), who characterized his bank's strategic goal as one of becoming a financial services aggregator, and compared the goal to that of Home Depot or Lowes, who were "aggregators" of home improvement products – "One Stop Shopping". A month later in the same publication an astute banker in a letter to the editor observed that your personal computer (smart phones didn't exist yet) was already the actual aggregator of financial accounts and the consumer needed look no further than their PC to find the most competitive and convenient way to build their financial world. A bank as an aggregator wasn't necessary because whereas Home Depot was eliminating physical trips to various vendors like the lumber yard, appliance store, electrical supply shop, garden center, paint store, etc.... you could already sit at your computer and evaluate/buy insurance, investments, loans, deposits etc.. With the march of time and technology this is still true. With facial recognition ID, super-fast speeds and tons of memory, it's pretty quick and easy to manage your financial life today with your devices, without needing a new super app.
The super app will eventually be figured out and probably be the province of a big player. If the app can figure out how to securely enroll all of your existing accounts it could be formidable, and if it can't users may find it more trouble than it's worth. The struggles with how to generate revenue, and more importantly profit, from a super app will be interesting. As a community bank it will be important for us to be compatible with a super app, so our customers can integrate their relationship with us into their "macro" world; but our value proposition of outstanding, personalized customer service and flexible solutions with competitive technology will still be where and how we win business.
Scott Yeoman
President & COO
First American State Bank
8390 East Crescent Parkway, Suite 100
Greenwood Village, Co 80111
Fax: 303-694-4429
Office: 303-694-6464
Mobile: 719-660-7809
Please use this link to upload sensitive information:
http://Firstamericanstatebank.leapfile.net
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Original Message:
Sent: 12/12/2022 4:22:00 PM
From: Rob Blackwell
Subject: Tuesday Topic: The Rise of the Super App?
The concept of the "super app"-a central portal to a range of virtual services related to payments, banking, games, stock and bond trading, travel, entertainment, and communications-is becoming increasingly popular around the world, including in the United States. According to a new report from PYMNTS and PayPal, 72% of U.S. consumers are now interested in such offerings.
This kind of idea is so old that it's new again. When I first started reporting on the banking sector at the turn of the Millennium, the so-called "financial supermarket" concept was in vogue. It was the motivating factor behind Citigroup's purchase of Traveler's Insurance and the passage of the Gramm-Leach-Bliley Act, which removed barriers to banks buying insurance firms. The idea was people wanted to go to one place for all their financial needs.
But that all eventually ended in tears. It turned out that people really didn't want a financial supermarket. Citigroup ended up selling Travelers in 2003, while GLB was blamed for the 2008 crisis (which feels like a stretch). As a result, I'm a bit wary of predictions that a super app can really do all those individual elements as well as a firm that specializes in a particular service. Not to mention the privacy and security risks CFPB highlighted in an August report on the convergence of payments and commerce.
I'd love to hear from the group on this topic. What are your thoughts on super apps? Are they part of your strategy? Why or why not?
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Rob Blackwell
Chief Content Officer and Head of External Affairs
IntraFi
Arlington, VA
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