2022 To Be Marked By Super Apps, Open Data, Generation Hashtag: Analyst

Super apps, openness in customer data ownership, and Generation Hashtag will be key topics in fintech in 2022, according to GlobalData’s Tech, Media, & Telecom (TMT) Predictions 2022.

GlobalData thematic analyst Amrit Dhami said while mobile commerce is leading to the development of super apps in the West, China will still be the segment leader. While the total value of mobile app transactions in the United States should top $266 billion in 2022, they will be $60.5 trillion in China.

“Mobile wallets act as a gateway to a broader range of financial services without the need for consumers to leave the app,” Dhami said. “Mobile point of sale software usually requires biometric authentication and offers more security than contactless card payments. It’s also more convenient for users, as they carry their phones around everywhere with them anyway, and no additional hardware is needed. This will continue to encourage consumers to abandon cash and cards.”

As mobile wallets, mobile commerce financial services and social media collide, it will encourage payment companies like PayPal to develop super apps which streamline the consumer experience and serve as access points for even more services. Such apps are present in some parts of the world.

But it’s not as simple as replicating the process, for Western social media companies fail to generate levels of consumer trust which are required in order for super apps to be successful, Dhami explained.

“In the absence of the regulatory hands-off approach in China that allowed Tencent and Alibaba to grow substantially, US social media giants must earn their users’ trust if they aspire to reach super-app status,” Dhami said.

GlobalData issued Thematic Scorecards to 35 social media companies and it said the majority scored less than two out of five for data privacy, including Meta and Snap. Data privacy is important to consumers and regulators alike, so those companies falling short must prove themselves tp both stakeholder sets before making the super app leap.

Dhami also expects the fintech unicorn club to induct a few new members in 2022. Currently there are 116 members worth an average of approximately $4.5 billion each. The flood of investments in startups we witnessed in 2021 should continue, to the benefit of companies like Corvus Insurance and Navi Technologies on the unicorn doorstep. Also watch for a number of unicorns like Stripe, Monzo and Chime to become public.

“The sheer volume of highly valued start-ups operating in fintech demonstrates the extensive ongoing disruption of the financial services sector by digital technologies,” Dhami said.“Disruptors and incumbent institutions will continue to form dynamic partnerships to capitalize on the innovation of start-ups and large user bases of traditional financial institutions. Goldman Sachs and Visa are among those building an extensive fintech network.”

Dhami said the concept of open banking has already produced some good results, with newcomers and incumbents allowing account and data links between institutions, moves which are important for tools such as smart budgeting, automated onboarding, and credit risk assessment.

“Open banking —where banks open up data for regulated providers to access — has been a key driver of partnerships between unicorns and banks, and has been delivered top-down in Europe through PSD2,” Dhami said. “A more open model of data ownership, where data can be moved across different institutions, increases transparency in banking services, and is an important step in shifting the ownership of customer data from banks to the customer. Institutions will be battling to win our trust and confidence.”

That openness of data ownership will continue to be a big theme in 2022, and it will fuel discussions around PSD3. That will further increase network development among financial institutions.

Another named generation is making an impact on society; this time it is Generation Hashtag, Dhami said. They are born between 1991 and 2005, and have been shaped by the 2008 crash and the COVID-19 pandemic. Generation Hashtag will migrate to commission-free apps, as they know technology and need to maximize what little wealth they have.

“Generation Hashtag is also wary of credit card fees, so is driving innovation in interest free, buy now pay later (BNPL) services,” Dhami said. “BNPL is convenient for consumers and lucrative for retailers, reducing cart abandonment. However, more transparency around BNPL services is urgently needed to ensure consumers understand that they are accruing debt through BNPL, which can negatively affect their credit scores. Regulators will pay more attention to BNPL following its rapid growth in 2021, with the Financial Conduct Authority already recommending rigorous affordability checks before consumers can use such services.”



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