The concept
of financial super apps is gaining momentum in Europe, but industry experts
remain divided on their optimal scope and regulatory implications, according to
Laura McCracken, Non-Executive Director at Guava Pay.

During the Finance Magnates London Summit 2024 (FMLS:24), McCracken talked with Jonathan Fine and highlighted the
ongoing debate surrounding super apps. She noted a shift towards more focused
financial offerings rather than all-encompassing platforms like WeChat or
Alipay.

Financial Super Apps Gain
Traction

After a
period of unbundling banking services, the industry is now consolidating
various financial functions back into unified platforms. This shift is driven
by consumer overwhelm, with the average person managing approximately 200 apps
on their smartphone. Consumers want an all-in-one solution, especially when it
comes to investments.

“When
you start talking about a more narrow version of a super app, like a financial super app,
there’s actually a lot more acceptance of the idea,” McCracken said during
a live interview with Finance Magnates’ Jonathan Fine. She attributed
this to growing consumer demand for consolidated services and the industry
trend of “rebundling” previously unbundled banking features.

An example of such apps is Revolut, which allows users to save, invest, and hold cryptocurrencies all in one place. Heading in a similar direction is the FX/CFD broker XTB, which aims to become a full-fledged fintech app.

The discussion comes as fintech companies and traditional banks alike explore ways to expand their digital ecosystems. Laura McCracken, an industry veteran with extensive experience in payments and banking since 1995, emphasized that European regulators are likely to resist overly broad super apps due to privacy concerns. McCracken, currently affiliated with London-based Guavapay, has previously worked for prominent companies such as Accenture, Grupo Santander, Wirecard, Meta, and Amazon.

Unconventional
Partnerships and Innovation

McCracken
also pointed to unconventional partnerships as a potential source of innovation
in the fintech space. She suggested that retail brokers could explore
collaborations with betting markets, citing the accuracy of prediction markets
during recent U.S. elections.

“The
betting markets have an engaged, active user base that are actually putting
skin in the game,” McCracken explained. “They care, and they’re
probably more accurate than traditional pollsters.”

Embedded Finance and
Cross-Border Payments

Looking
ahead, McCracken identified embedded finance and cross-border payments as key
areas for startup innovation. She highlighted the potential for integrating
financial services into various customer experiences, from automobiles to voice
assistants.

“Cross-border
payments and remittances is a huge area,” McCracken stated. “I think
that’s an area where fintechs can be very innovative and partner with companies
like social media platforms that have connections around the world.”

Regulatory Landscape

Addressing
the regulatory environment, McCracken offered a view of fintech innovation in
the EU versus the U.S. While acknowledging recent deregulation efforts in the
U.S., she noted the complexities of navigating state-level regulations.

McCracken
expressed optimism about the UK’s potential to attract fintech innovation,
despite recent regulatory tightening. “I’m hearing some positive signs
from government and from the regulator that we are looking to loosen things up
a little bit in financial services,” she said.

“If I have
to bet again, I’m going to bet on the UK,” McCracken concluded. Especially the fintech investments in the region soared to more than $7 billion in H1 2024.

This article was written by Damian Chmiel at www.financemagnates.com.

—

— CONTENT NOT MODERATED BY G6

— Please be careful with this content. If you don’t think it should be here, please get in touch with us at [email protected]