A research report by CB Insights has posited that the development of ‘super apps’ from single-function digital wallets is fast gaining ground, with the trend expected to continue especially in Asia, Europe and the United States. The CB Insights Industry Analyst Consensus forecasts this trend is expected to grow the digital wallets market from the current $1 trillion to $7 trillion by 2027.
According to the report titled ‘The future of the wallet: how AI advisors, digital IDs, and wearables are turning mobile wallets into the next super apps,’ the development of super-apps has become necessary given the growing adoption of digital wallets for payments as prompted by the coronavirus pandemic.
Not everyone believes this is a wise course of development.
The report indicates that Asia appears to be leading the way in this regard as many digital wallets have shifted from their initial functions to other service areas such as food delivery, hotel and restaurant bookings and taxi-hailing, among others. It cites two well-known Chinese apps, AliPay and WeChat, which both started off as single-function apps for financial payments, but later added up other services.
In Europe and the United States, the report notes, some fintech companies are also developing super-apps. French startup Lydia and PayPal in the U.S. are cited as examples in this case, with many other U.S. fintech companies said to be trying their feet into the novelty.
‘Smart’ financial assistants
Apart from projections about the growth and development of super-apps, CB Insights also looks at artificial intelligence-based automated financial assistants and the role they can play in personal finance management.
Here, the report predicts that the “assistants will take on the role of a smart advisor who continuously reviews clients’ subscriptions and bills, manages their budgets, proposes saving and investing strategies, and provides other relevant feedback on how to reach financial goals.”
The report adds that some fintech companies such as robo-advisors are already making efforts to build AI-based automated money management solutions.
More uses for digital ID wallets
Apart from serving as carrier of digital ID documents such as ID cards and driver’s licenses, digital wallets, whose adoption has been driven by the pandemic, can be used for carrying a wider range of information such as medical records or office keys, the report highlights.
CB Insights believes the “standard digital ID wallets of the future will store payment information along with other essential documents, including state IDs, SSNs, passports, citizenship information, medical records, home and office keys, and even biometric information such as fingerprints and face scans.”
Wearables industry expanding
According to the CB Insights report, wearables which were first introduced for health monitoring and fitness purposes, are now also extending to other areas such as payments and other touchless transactions.
The global wearable payment device market was valued at $285 billion at the end of 2019 and is expected to soar to $1.3 trillion by 2028, the report notes.
CB Insights believes that in the future, mobile wallets will be “safer and smarter.”
“Whether stored in a users’ smartphone or attached to their wrist, the next generation of mobile wallets will go beyond transaction facilitation, offering a variety of financial products as well as digital ID management and dedicated virtual assistants. Equipped with advanced AI-driven analytics and customized user experiences, our wallets will play a larger role in our financial decisions over time, becoming reliable advisors and trusted sources of information for all things finance,” the report summary concludes.