Customers buy and sell gold at a shop in Hanoi on August 19, 2011. Allocated gold, which is owned outright by an investor and is stored, under a safekeeping or custody arrangement, in a professional bullion vault, is a popular investment option. Photo: AFP / Hoang Dinh Nam

The dominance of the super app is already unfolding in Asia, which is leading the way for the rest of the world. These super apps represent the next frontier in consumer technology, becoming so deeply integrated into the consumer’s life that they become indispensable operating systems. 

It is clear that their success primarily originates from a native mobile payments system. Fintech integration has been a core accelerating factor, and for the next generation of super apps, offering gold trading matters more than ever. 

Super apps: multi-service marketplaces

Super apps need no introduction in Asia. WeChat hosts more than a billion users, and there have been multiple super apps established throughout emerging markets, including Grab, Go-Jek, Kakao and AliPay.

Users can talk with friends, order food, or book a flight – all within one app and without having to switch to any others. The app becomes a multifaceted marketplace rather than a single service offering. 

A native mobile payments system has been a crucial ingredient to rapid scalability, allowing once single-purpose applications to partner with various businesses and offer hundreds of products and services within a single app.

By comparison, financial technology is a late-blooming industry. App-based finance was a relative latecomer to digitization, with a significant level of mistrust for digital banking and an ingrained loyalty to long-established traditional banks, with face-to-face appointments preferred. 

However, there are signs that the Covid-19 pandemic has accelerated the shift toward digitization. A report by Baker & McKenzie showed that within the Asia-Pacific region, the pace of digital transformation has been increasing because of the impact of Covid-19, with 92% of business leaders re-evaluating their digital strategies and optimizing digital infrastructure to remain competitive in response to the pandemic.

This recent shift has primed the fintech landscape to offer an expansion of their services, and startups are now competing to build out their product suites to meet increasing demand. 

Racing to expand coverage and products

The new generation of app users want everything ideally in one place, with minimal friction – and at the same time, are more focused on their personal finance than ever before. 

The behavior and habits of Asia-Pacific finance consumers are rapidly evolving, with the new generation wanting to use a new suite of digital banking options, including challenger banks and fintech firms that are willing to meet their banking needs.

McKinsey reports that digital natives (those born between 1980 and 2012, including Generation Z and millennials) are likely to drive Asia’s consumption over the coming decade, as they make up more than one-third of Asia’s consumer population. 

A recent report found that 20-30% of this generation spend more than six hours a day on their mobile phones, and more than 70% of them are very confident of meeting their financial goals. 

This is where the developers of the next generation of super apps need to think about the financial products they are offering. 

As fintechs look to expand their global reach and product depth, sooner or later, they will need to offer alternative wealth and investment products, so it’s only a matter of time until they look to allocated gold. 

The enduring allure of gold

Global investment demand for gold has increased at an average of 18% each year since 2000, and a World Gold Council study found that 61% of respondents trust gold more than fiat currencies. 

Investors are more tuned in than ever to innovative ways of managing their portfolios through turbulence. The recent implementation of Basel III pushes the industry toward physical gold over paper, and demand for the precious metal increased by 40% from 2019 to 2020. 

Business-to-consumer fintechs are racing to build their product suites; it’s a game of survival of the fittest. Companies are looking for geographical domination and expansion of their product offering. Lose the game, and their users will flip over to the next platform. B2B (business-to-business) integrations enable super app providers to capitalize on the huge demand for allocated gold from fintech and operators of embedded finance.

The firm I represent, Goldex, is already directly working with 20 fintech companies to provide a convenient option for allocated gold, creating a product that so far has no direct competition. Apps can offer their users allocated gold within six weeks.

As the world increasingly moves toward the super-app model, more companies will likely consider how they can integrate several services rather than focusing on the specialization of one product. 

To tap into the full potential of global growth, services that offer B2B integration products that can deliver investment options like gold could shape the future of the fintech industry and the next generation of super apps. 

Sylvia Carrasco

Sylvia Carrasco is CEO of Goldex.