Can super apps save the day for SMEs and their banks?

Small and medium-sized enterprises (SMEs) have been hit hard by the pandemic, with access to funding becoming increasingly difficult and creating uncertainty for owners.

Digitisation needs to be at the heart of the next wave of SME banking services

The nature of SMEs often means a minimal credit history, which leaves bankers with an uphill battle to determine who is worthy of a loan. And this is resulting in delayed decision times and too many declines.

While a sudden drop in revenues and acute liquidity shortages is a problem today, SMEs have faced banking challenges for many years, especially when it comes to personalisation and tailored offerings.

SMEs are between 30 and 250 people in size, yet SME products are nearly always one size fits all, and often don’t take into account the different size of businesses nor the particular sector needs they might be facing.

And these standardised products aren’t 100% digital, with SMEs often needing to visit branches or perform analogue processes.

SMEs and bankers agree that products need to be better digitised and customisable to specific needs. And the emergence of super apps has created a unique opportunity to achieve this.

Enter the super app

The new holy grail of fintech is the so-called super app. Super apps allow users to access an entire ecosystem of products and services from banking through to transport and entertainment. With their extended capabilities, customers can purchase products, book appointments and access services — all within a single platform.

The super app is dominant in emerging markets with the likes of Gojek in Southeast Asia attracting millions of users, but they’re also gaining in popularity across Western markets.

Super apps rely on mini programmes—lightweight apps that run inside another app. These make it possible for one app to offer the service of many apps.

Consumers are increasingly gravitating towards super apps around the world because they offer a better user experience, security, and rewards than other financial service products.

Super apps have captured the hearts and minds of consumers, but are SMEs next?

While SMEs won’t need to order food or hail taxis, super apps that integrate data and functionality with other online services can provide value for businesses looking to manage their operations more efficiently.

Whether it’s HR or accounting, a well-connected platform will enable once mundane tasks to be automated and skilled workers to concentrate on the tasks that really matter.

Banking super apps for SMEs

From a digital transformation standpoint, SMEs are still a relatively untapped market, often overlooked and underserved.

The need for a better digital banking experience will only grow for the SME customer segment, many of whom are already moving to fintechs and neobanks with their needs being unmet through traditional institutions.

With fintechs and technology companies creating super apps, banks become one step further removed from their customers.

To stop this from happening, digitisation needs to be at the heart of the next wave of SME banking services, and super apps can be an anchor point and vehicle for this change.

SMEs want different tools and super apps can deliver them.

Benefits of super apps

SME-focused super apps provide banks with several business benefits:

• Super apps allow banks to access data. By inviting third parties into the ecosystem, banks can gain access to a large user base and incredible volumes of customer data. The wealth of data can make banks better equipped to tailor services and offer new products.
• Super apps allow banks to maintain contact. Another key advantage is the frequent customer contact – constant engagement helps businesses to create trust in the product and build brand reputation through creating a seamless and unique customer experience.
• Super apps allow banks to monetise data. The more time a user spends in an application, the more that company can capture their data, monetise their attention and build more dependency, and it’s the newer players that are recognising this.

Banks need to seriously consider developing partner ecosystems to build a successful super app and create personalised and better customer experiences for their SME audience.

By building a super app, banks make themselves easy to connect to and integrate with. And as we’ve seen from open banking and embedded finance, there’s a big opportunity to widen distribution and access new customers when part of an open ecosystem.

SMEs need their banks now more than ever. And if banks can offer business critical digital services – whether finance focused or not – through an easy-to-use app, they’ll go a long way to saving the day.