By Alessandro Hatami, founder of strategic consultancy Pacemakers
Today’s gold standard in digital innovation is set by the rush to SuperApp status. Tech giants Uber, Meta and Klarna are all looking to diversify their reach, buoyed by the phenomenal success of all-in-one lifestyle apps such as China’s WeChat and Alipay.
Until recently, Revolut’s place in these ranks was unclear. Despite the arrival of both Revolut Stays and Revolut Chat, the finance app hasn’t veered much from its ambition to be “a global bank which gives you access to all financial services” (says CEO Nikolay Storonsky).
But things could be about to change. Since the beginning of this year, Revolut has unveiled a raft of new market services, including the Revolut eSIM for roaming charges abroad, and a push into media-model advertising sales. Coupled with its pivot to crypto trading, these developments could well signal a move by Revolut to match both Asian and Silicon Valley rivals with what Elon Musk hails as “the Everything App”.
Such a move is not without risk, however. To be successful, SuperApps demand clear corporate vision, deep-rooted cultural renewal and supportive regulatory environments to thrive – no mean feat at a time of seismic upheaval in the digital ecosystem. Here are five key considerations that will determine the fate of Revolut’s SuperApp moonshot:
1. Do Revolut consumers want their bank to be a SuperApp?
Among the many major brands testing the SuperApp frontier are X, PayPal, Meta and Klarna – each of which shares its own privileged relationship with customers. Can Revolut be sure that its own audience would support a dilution of the brand’s core capabilities? Do users of the app even want a multipurpose service that covers, for example, grocery deliveries or gaming? And would Revolut be an instinctive homeplace for these features if so? In such a crowded sphere, a better solution for fintechs exploring the space might be to collaborate with like-minded brands – leaning into a SuperApp ecosystem, rather than going it alone.
2.Can the SuperApp model even work in Europe?
To date, the most popular SuperApps include China’s Alipay and WeChat, Japan’s LINE, Tata Neu in India, and Grab and Gojek in Southeast Asia. Consumers in Asia appear to favour a SuperApp model whereby accessing anything in one space, from chat functions to shopping and finance, is the norm. By contrast, as one academic tells the New York Times, in the US and similar markets “people are accustomed to single-service apps, which makes moving to a multiservice app a bit disorienting.”
In addition, Asian SuperApps are helped by booming domestic markets, and lower foreign competition; neither of which are givens in the competitive Western sphere. Meanwhile, apps here seem more likely to develop on a sector-specific basis, each brand operating in its own area of consumer influence. Seen against this backdrop, Revolut needs to be wary that its expansion doesn’t end up as a costly and distracting over-reach. With a series of cross-market interests now in the mix, it may already be testing the outer limits of its SuperApp potential.
3.Where will Revolut expand next?
Revolut needs to make the right decision about where to expand next, to avoid confusion and pushback among its 40 million customers. Given that the business was born out of frustration with foreign transaction fees, expanding its footprint in travel services might make sense – hence a new Aer Lingus partnership. Wherever it heads next, Revolut must continue to mine real-time data from its 400 million+ monthly transactions, to understand exactly what its audience wants and expects.
4.Should a non-bank be trusted with so much financial data?
For a SuperApp to work, consumers can’t just want it; they have to trust it, too. Already, trust in Big Tech is waning – and those seeking to control even more data could make the situation worse (particularly if would-be SuperApps can’t prove service value with multipurpose use).
Revolut has been granted a banking licence from Mexico, and its European regulator in Lithuania, but it hasn’t yet secured a UK banking licence – having applied for it in 2021. The London-based fintech is also delaying its application for a US banking licence. Despite a draft application three years ago, Revolut has yet to formalise its request.
The complexity of obtaining banking licences seems to have had a direct impact on Revolut’s financial services strategy. Storonsky himself admits that having the protection of services like the UK Financial Services Compensation Scheme would help build consumer trust in the finance app. And the fact that Revolut is having a hard time with banking authorities could well be the primary trigger for pursuing its SuperApp strategy.
5.What about regulatory challenges?
The trust roadblock applies to regulators, too, who have shown little appetite to hand Big Tech, including fintechs, more power. The banking industry is highly regulated and subject to intense scrutiny – which may limit the scope of what Revolut can achieve as a SuperApp, compared to its Chinese counterparts. There are also major challenges around data privacy looming. Already, many fintech SuperApps, even in more receptive Asian markets, are grappling with regulatory headaches.
Apple’s travails could be yet another indication of the risks with SuperApps. The
US Department of Justice has filed a landmark lawsuit against Apple, accusing it of illegally maintaining a monopoly over smartphones by undermining “apps, products, and services that would otherwise make users less reliant on the iPhone.” Apple denies the claims and is contesting the lawsuit. Is it possible that successful SuperApps may – at some point – face similar action?
Revolut has weathered a number of challenges recently, including regulatory scepticism and its continued absence of US and UK banking licences. In such a climate, a strategic expansion into the SuperApp world may reinvigorate investor appeal. But Revolut must tread carefully, ensuring a consistent experience in line with changing user behaviours across all emerging verticals. A crack tech team and experimental culture are also must-haves to win over consumers where it matters most – at the screenface.
