By Jovi Overo, Managing Director of BaaS, at Unlimint 

So, what is the next big thing in banking and BaaS? In simple terms: embedding financial services into people’s everyday lives. Whilst this may not be a direct trend that can be considered ‘the next big thing’, it is one of the most important things which is only 1% of the way there. Where do most people spend their everyday lives? Social media (for better or for worse). Where will people spend their everyday lives in the future? The Metaverse.

Social media is undoubtably a powerful source, not only to inform but to persuade. With the use of social media, banking could, and really should, be unlocking fascinating use cases, limited by the banks’ historic understanding of what a banking product is. Considerations such as every customer having the ability to have their own product feed would allow a single customer to scroll and engage with saving rates as an example. Similarly, should another customer want to receive rewards due to monetising their data in Bitcoins; rather than launch new products for each customer, why can’t the customer change that setting, personalise it and launch new products suited and tailored to them?

Financial products, which are regulated are built by banks that, at its core, are still very antiquated and legacy driven in their thinking, thus reflected in the products built. Banks define financial products and the parameters by historic norms.

In some part, this is where super-apps will be the dominant model and I fully expect this in 2022. Banks need to move the focus from simply conducting transactions towards building more long-term relationships. Relationships that are driven by data. Consented data, tailored and hyper-personalised.

Banks need to move away from just ‘transacting’ payments and into offering solutions which:

1. Utilise existing information and data points on their customers. So that should the customer use any of the banking services, the process will be streamlined in comparison to a new customer and would cost them less than it would do for a new customer
2. Utilise information that allows the bank to target well surfaced opportunities for customers and these offers solve emerging needs
3. Utilise information to proactively move customers into the best products and services they qualify for.

Consumers will take it as standard, to expect more convenient functionality and frictionless experiences from payments and banking.

The super-app of 2022 will be one where every user behaviour, will feed the algorithms. These will include data collections of numerous touch points and considerations; such as purchase, interactions and engagement, predominately from the use of social media. These apps will then use the data to analyse every decision made and generate insights into the data collated, all centred around real time human connectivity. Through this data, hyper-personalisation is created. A connected system where the movement of money is mapped to the daily lives and activities of consumers and businesses. The average person has circa 6,000 thoughts a day, the vast majority of which are not about financial services. The race for hyper-personalisation is being able to orchestrate and weave financial services into daily lives, rather than being a managed or consumed services. The super app of the future will have that.

Thus, the Super-app will empower businesses and customers to hyper personalised and configure their own financial service products and that is why we must fundamentally re-think the architecture in which financial products are built. Therefore, I believe Web 3.0 and the application of the Metaverse and the ubiquity of Decentralised finance is really going to change things.

In summary, I see the future of banking which will no longer be banking as we know it. I recall seeing a wonderful phrase that said, ‘the future of banking is not banking.’ Trite, maybe. However, I think it is where we are headed. We are only witnessing the very beginning – a long march into the abyss of financial services.

For the far distant future, I am willing to bet that the Metaverse will be the biggest paradigm shift in Web 3.0. My avatar will be able to walk around the metaverse and buy digital goods and services with digital currencies. There will be a thriving and robust digital economy and virtual universe where decentralised finance, NFTs and digital currencies are the standard. This is where the physical, digital and virtual world collide driven by NFT’s and Defi. One Defi product is a building block for a more complex Defi product, and one can continuously build on one another.  For one find it hard to see a need for banks in the future.