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 Cross-Border Payments Cross-border payments refer to transactions involving individuals, companies, banks or settlement institutions operating in at least two different countries.The concept of cross-border payment is not new however, despite its rise in importance in the 21st century.New technology and the growth of blockchain has brought the term cross-border payment into our daily conversations.Cross-border payments are an essential term that refers to any transaction involving private individuals’ companies, bank Cross-border payments refer to transactions involving individuals, companies, banks or settlement institutions operating in at least two different countries.The concept of cross-border payment is not new however, despite its rise in importance in the 21st century.New technology and the growth of blockchain has brought the term cross-border payment into our daily conversations.Cross-border payments are an essential term that refers to any transaction involving private individuals’ companies, bank Read this Term 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 Fintech Financial Technology (fintech) is defined as ay technology that is geared towards automating and enhancing the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was primarily used as a back-end system technology for renowned financial institutions. However, it has since grown outside the business sector with an increased focus upon consumer services.What Purpose Do Fintechs Serve?The main purpose of fintechs would be to suppl Financial Technology (fintech) is defined as ay technology that is geared towards automating and enhancing the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was primarily used as a back-end system technology for renowned financial institutions. However, it has since grown outside the business sector with an increased focus upon consumer services.What Purpose Do Fintechs Serve?The main purpose of fintechs would be to suppl Read this Term 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.