Ever since Elon Musk purchased Twitter last October for $44 million, he has been hinting of spinning the social media giant into what he is calling “X, the everything app.” In fintech, “everything apps” are known as super apps, and they exist primarily in Asia.

One of the latest developments in transitioning Twitter into a super app is Musk’s move to change Twitter’s name to X Corp. But a super app is much more than a name. Here’s a look at what the social media app currently offers, what it’s working on, and what it still needs to become a fully fledged super app.

What it has

Social
Social is most certainly Twitter’s strongest attribute. The micro-blogging platform was founded in 2006 and currently has around 450 monthly active users. While this is a considerable user base, however, it pales in comparison to well-known super app WeChat, which counts 1.3 billion monthly active users.

Investment tools
Earlier this month, Twitter partnered with eToro to not only offer real-time pricing data for stocks, but also to facilitate trades. The trades, however, do not take place within Twitter’s interface. Instead, users are routed to eToro’s website for stock details and to make trades.

What it’s (publicly) working on

Generative AI
Last week, Musk unveiled a new company called X.AI, The move confirmed rumors of his plans to launch a generative AI product after he purchased thousands of graphic processing units. X.AI is expected to compete with OpenAI, which Musk co-founded in 2015 but left in 2018 to avoid a conflict of interest.

While most super apps do not boast their own generative AI tool, adding a powerful chatbot such as OpenAI’s ChatGPT would be a major differentiating factor

Payments
Musk is publicly vociferous about his plan to add Venmo-like payments capabilities to Twitter. And it’s not just talk. Twitter filed with the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) and is also in the process of obtaining necessary state licenses, as well.

After Twitter begins facilitating peer-to-peer payments, it may begin offering more digital bank-like tools such as a high-yield savings account or even an X-branded payment card. This leads the conversation into what Twitter still needs to become a super app.

What’s missing

Personal finance
Twitter already offers stock trading (through a third party) and it is working on offering peer-to-peer payments. There is more to personal finance, however, than just investing and spending. In order to truly become an “everything app,” Twitter must offer brick-and-mortar payments, as well as an in-app dashboard that helps users track their spending, savings, and investments.

Shopping
This may end up being one of the most challenging aspects for Twitter to add in a way that would compete with the current top super app contenders in the U.S.– Walmart and PayPal. Currently, Walmart offers consumers access to goods from an Amazon-like supplier base, as well as to goods in their local Walmart store. PayPal’s shopping experience is less compelling, but offers deals from major service providers and retailers (including Walmart).

For Twitter to start a shopping experience from scratch wouldn’t be unfathomable, but it would take a long time. If it is seeking to compete with Walmart as a super app, it will likely need to find success via a partnership.

Transportation
A few of the most well-known super apps– Grab, Gojek, and Ola– began as transportation apps. Adding transportation capabilities has the potential to draw users into the app on a daily basis because they not only facilitate commutes via ride-hailing or public transportation payments, they also facilitate hyper-local delivery, grocery delivery, and restaurant delivery. These aspects play major roles in the lives of consumers.

Health services
Amazon, Walmart, and others have tackled the fragmented healthcare industry. Providing affordable health services, such as appointment booking, tele-health calls, records management, and ask-a-nurse services in a single place provides a lot of value for end users.

Health services will not be a primary driver bringing users into Twitter’s super app, but it will certainly help to keep them around and may even help target the app’s older users.

Insurance
Similar to adding health services, insurance tools will not serve as a primary draw for users. However, offering tools such as a digital lock box with insurance cards, contact information, coverage options, and payment history is a valuable add-on and can help reach older users not necessarily seeking social or payment capabilities.

Government and public services
To become a well-rounded super app, Twitter should add government and public services, such as public transportation payment and tracking, library cards, and tax preparation services. In the U.S. however, with the advent of FedNow and the potential addition of a CBDC, the government may end up beating Twitter to the punch with a super app of its own.

Photo by Possessed Photography on Unsplash

If you need a break from bank failure news, here’s something refreshing. OpenAI’s GPT-4 was released yesterday. The new model is the successor to GPT-3.5-turbo and promises to produce “safer” and “more useful” responses. But what does that mean exactly? And how do the two models compare?

We’ve broken down six things to know about GPT-4.

Processes both image and text input

GPT-4 accepts images as inputs and can analyze the contents of an image alongside text. As an example, users can upload a picture of a group of ingredients and ask the model what recipe they can make using the ingredients in the picture. Additionally, visually impaired users can screenshot a cluttered website and ask GPT-4 to decipher and summarize the text. Unlike DALL-E 2, however GPT-4 cannot generate images.

For banks and fintechs, GPT-4’s image processing could prove useful for helping customers who get stuck during the onboarding process. The bot could help decipher screenshots of the user experience and provide a walk-through for confused customers.

Less likely to respond to inappropriate requests

According to OpenAI, GPT-4 is 82% less likely than GPT-3.5 to respond to disallowed content. It is also 40% more likely to produce factual responses than GPT-3.5.

For the financial services industry, it means using GPT-4 to power a chatbot is less risky than before. The new model is less susceptible to ethical and security risks.

Handles around 25,000 words per query

OpenAI doesn’t measure its inputs and outputs in word count or character count. Rather, it measures text based on units called tokens. While the word-to-token ratio is not straightforward, OpenAI estimates that GPT-4 can handle around 25,000 words per query, compared to GPT-3.5-turbo’s capacity of 3,000 words per query.

This increase enables users to carry on extended conversations, create long form content, search text, and analyze documents. For banks and fintechs, the increased character limit could prove useful when searching and analyzing documents for underwriting purposes. It could also be used to flag compliance errors and fraud.

Performs higher on academic tests

While ChatGPT scored in the 10th percentile on the Uniform BAR Exam, GPT-4 scored in the 90th percentile. Additionally, GPT-4 did well on other standardized tests, including the LSAT, GRE, and some of the AP tests.

While this specific capability won’t come in handy for banks, it signifies something important. It highlights the AI’s ability to retain and reproduce structured knowledge.

Already in-use

While GPT-4 was just released yesterday, it is already being employed by a handful of organizations. Be My Eyes, a technology platform that helps users who are blind or have low vision, is using the new model to analyze images.

The model is also being used in the financial services sector. Stripe is currently using GPT-4 to streamline its user experience and combat fraud. And J.P. Morgan is leveraging GPT-4 to organize its knowledge base. “You essentially have the knowledge of the most knowledgeable person in Wealth Management—instantly. We believe that is a transformative capability for our company,” said Morgan Stanley Wealth Management Head of Analytics, Data & Innovation Jeff McMillan.

Still messes up

One very human-like aspect of OpenAI’s GPT-4 is that it makes mistakes. In fact, OpenAI’s technical report about GPT-4 says that the model is sometimes “confidently wrong in its predictions.”

The New York Times provides a good example of this in its recent piece, 10 Ways GPT-4 Is Impressive but Still Flawed. The article describes a user who asked GPT-4 to help him learn the basics of the Spanish language. In its response, GPT-4 offered a handful of inaccuracies, including telling the user that “gracias” was pronounced like “grassy ass.”

Photo by BoliviaInteligente on Unsplash

It can be difficult to pin down a birth year for fintech, but no matter how you look at it, our industry has come a long way. I was recently reminiscing and found a post published in 2003 by Finovate Founder Jim Bruene titled, The 10 Most Significant Innovations & Developments of 2003. These developments, Bruene said, “provide the best glimpse at the future of online financial services delivery.”

2003 was officially 20 years ago, which makes it a perfect benchmark. I’ve taken a look at the 10 developments and innovations that Bruene deemed “most significant” in 2003, and outlined some of fintech’s most recent updates and persistent struggles.

Phishing undermines trust (for now)

One of the original enemies to widespread adoption of online banking was phishing. In the last two weeks of December of 2003, one (now-defunct) organization had recorded 60 unique phishing attacks, sending an estimated 60 million fraudulent messages.

Those numbers don’t look so bad compared to today’s figures. The Anti-Phishing Working Group (APWG) recorded more than 14,000 phishing attacks per day in the third quarter of 2022, marking the worst quarter for phishing the organization has ever observed. However, while phishing persists, it hasn’t deterred the majority of users from adopting digital banking.

Banks move to boost security perceptions

In this section, Bruene referenced an increase in keylogging incidents, along with one bank’s efforts to circumvent keylogging attacks by adding a keypad on the screen to allow users to click the buttons to enter their PIN instead of typing on their keyboard. The bank also implemented a secondary password requirement.

While these workarounds likely mitigated some of the fraud, they simultaneously introduced more friction for end users. Today, many firms have implemented biometrics to eliminate keylogging. However, while biometrics may have gotten rid of keylogging attacks, the authentication method has not put an end to fraud.

Citibank launches interbank transfers (A2A)

Citibank added online interbank transfers in the fall of 2003, making it the first major U.S. bank to offer such a service. At the time, Citi tapped CashEdge (acquired by Fiserv in 2011 for $465 million) to power the transfers.

Today, of course, the industry doesn’t consider account-to-account transfers an innovation. Rather, the service is now considered table stakes for all banking service providers. What has changed are the rails. A handful of banks have started piloting using the blockchain to transfer funds, especially in the case of cross-border payments.

Press turns positive toward online banking and other online financial activities

Twenty years ago, the dot-com crash was still fresh in the minds of both investors and everyday consumers. According to Bruene, 2003 was a turning point as consumers began to embrace the conveniences and efficiencies of online banking.

Today, while we’re not recovering from a dot-com crash, we are still reeling from the FTX scandal that took place late last year. It is estimated that around $1 billion to $2 billion in consumer funds were lost after the digital crypto exchange failed. And while the event will not result in negative press about fintech in general, it has already soured the press and industry analysts on crypto.

Bank of America hits seven million users

As you may imagine, adoption of Bank of America’s digital banking looked vastly different in 2003. “Bank of America had as many online banking customers as all U.S. banks combined had five years ago (at year-end 1998),” said Bruene. “The bank’s 7 million active users account for 43% of its checking account base, and 22% of all households. Year-over-year growth was an impressive 50%, with 2.3 million new active users.”

Today, Bank of America serves 67 million retail and small business clients. Of those, 55 million use Bank of America’s digital banking services. In July of last year, those customers logged into their Bank of America accounts one billion times– a record number for the bank.

The decline of paper statements begins

While 2003 may have marked a decline in paper statements, it didn’t mark the beginning of the end. According to a 2017 Javelin Strategy & Research report, only 61% of checking account customers have committed to paperless statements. In the report, Javelin suggests that much of this is unintentional. “Consumers now reflexively reach for their smartphones in all aspects of their lives and banking is not an exception,” said Mark Schwanhausser, Director, Digital Banking at Javelin Strategy & Research. “The intent is not to take statements away from customers; it is to provide an alternative that convinces them that paper statements are as unnecessary and obsolete as a checkbook register.”

Banks redesign websites for Yahoo-like clarity

Of the ten developments on this list, this one is my favorite, and not only because of the use of Yahoo! as an example. Optimizing online user interfaces is a science, and by 2003, developers didn’t know as much as they do today about creating user-friendly services.

Today, the shining examples in tech have shifted from Yahoo! to the likes of Uber, Stripe, and Airbnb. And by now, most large firms’ digital experiences exhibit “Yahoo-like” clarity. Still, there will always be room for improving the user experience, especially as consumers become aware of new enabling technologies like open finance.

Real-time credit for remote deposits

In this section, Bruene applauded two FIs for offering consumers instant credit for mailed remote deposits. It baffles me to think about mailing in a paper check to deposit it. However, in a pre-smartphone era such as 2003, there weren’t many other options that didn’t require additional hardware or infrastructure.

Today, while consumers can deposit most checks via smartphone, the deposits still generally take two-to-three days to post in consumer accounts. As a bonus, most firms have discovered a way to turn remote deposits into a revenue generating opportunity by charging consumers for instant deposits into their accounts.

Identity Theft 911 provides a credible source to fight ID theft

Identity Theft 911 has a storied history. The company rebranded to CyberScout in 2017, was acquired by Sontiq in 2021, which was bought by TransUnion in late 2021. Regardless of the multiple transitions, all companies shared a similar mission. Today, TransUnion helps consumers build and grow their credit scores, offers credit alerts, fraud alerts, credit monitoring, and more.

What’s different about this industry today, however, is the number of competitors in the space. Many organizations offer free credit monitoring. Other, paid services offer monitoring and reporting from all three bureaus, identity theft insurance, and more.

Photo by Leeloo Thefirst

If you plan on binge watching holiday movies in the next few weeks (or if you have been since October), here’s something to think about. Did you know that many of these films come with lessons for the fintech industry?

Here are some films you may want to watch over your winter break, along with some of the wisdom they hold.

Home Alone (1990)

In this movie, Kevin McCallister finds himself left at home without any adults to help him carry out daily tasks and defend himself against burglars. In the same way, many customers are conducting their banking activities from home on their own devices. The only tools they have to successfully conduct banking activities are a strong password and your bank’s user-friendly design.

Lesson: Don’t make your customers feel at home alone. Provide them with tools they need to successfully conduct everyday banking tasks from your app.

It’s a Wonderful Life (1946)

After George Bailey contemplates suicide during a time of financial instability, his guardian angel comes to show him all the ways in which he has made a difference in the lives of others. In the end, he begs his angel to give him his life back. After he does, his community rallies around him to help him regain financial stability. The current economy is impacting firms across banking and fintech differently. Every organization has a storm to weather.

Lesson: Pay attention to what’s truly important in life and maintain a focus on community, especially in the midst of economic turmoil.

Family Stone (2005)

When a woman from the big city, Meredith, accompanies Everett, her boyfriend, to his childhood home for Christmas, they both discover that they aren’t right for one another. As the story progresses, it becomes apparent that Everett and Meredith’s sister Julie are falling for each other. Keep your bank or fintech partners in mind while watching this one.

Lesson: Finding the right bank or fintech partners can be a struggle. However, it is worth conducting proper due diligence to find the right partner before committing.

The Santa Clause (1994)

Toy salesman Scott Calvin is unexpectedly forced to become Santa Clause after the original Santa Clause falls off his roof. After spending much of the movie in denial and resisting his new role as Saint Nick, Scott Calvin ultimately accepts his new role, and everyone is better off because of it. Has your organization ever had to make a similarly drastic pivot?

Lesson: When the needs of the customer evolve, so should your business. Being able to pivot to meet customer expectation not only benefits end users, it will also be good for your bottom line.

Die Hard (1988)

When New York City Policeman John McClane visits his ex-wife at a holiday party on Christmas Eve, terrorists attempt to take over the building and John realizes that he is the only one who can save everyone. Whether you can see the fraudsters or not, everyone deals with them on a daily basis.

Lesson: You are responsible for creating the first line of defense between your customers and cybercriminals.

Jingle All the Way (1996)

In this holiday movie, Howard Langston tries to impress his son by giving him the season’s hottest toy, the Turbo-Man, for Christmas. The toy is almost sold out, however, and Howard goes to great lengths to compete with another father to get the toy. Ultimately– and only after proving himself a hero– Howard gets the Turbo-Man toy to give to his son in time for Christmas. While the customer acquisition race isn’t as competitive as a war over the Turbo-Man toy, it may seem like a battle at times.

Lesson: There will always be competition between and among banks and fintechs. And just like Howard’s fight for Turbo-Man, fighting to gain customers takes sacrifices and ultimately may require your organization to prove itself a hero to the customer before winning them over.

How the Grinch Stole Christmas (1966)

The Grinch, who hates Christmas, tries to take the joy away from the townspeople of Whoville by stealing their presents and other Christmas paraphernalia. Even after he does so, however, he hears the townsfolk joyfully celebrating Christmas, despite the lack of presents, food, and decorations. In the end, the Grinch realizes that Christmas is more than presents, tinsel, and bows. Just as the Grinch discovered there is more to Christmas than the money-making aspects of it, perhaps we can all look beyond our bottom lines this season to discover how we can better serve our target market.

Lesson: Perhaps there is more to fintech than just pandering to populations that seem the most profitable. Look for ways to benefit to others, even if they may be a net-zero opportunity.

Any Hallmark Christmas special

Many Hallmark holiday movies seem to share a similar premise. A big-city girl inherits a vineyard or a bed and breakfast in a small town. During her visit to the country, she meets a charming man and falls in love with both him and the small town lifestyle. You don’t have to watch a Hallmark movie to realize that expanding your horizons can be beneficial.

Lesson: It may profitable to serve the underserved populations found in rural locations. They could have more in common with your existing target audience than you think.

National Lampoon’s Christmas Vacation (1989)

Clark Griswold tries to create the perfect Christmas for his family, but when the Christmas bonus he expected for the year fails to come through, Clark’s cousin Eddie takes the issue up with Clark’s boss. Though Clark ends up receiving his bonus after all, the movie serves as a reminder not to financially overcommit before funds are guaranteed.

Lesson: Even when times are good, don’t count on extra cash to get your company through. Watch your burn rate.

Frozen (2013)

The main characters, sisters Anna and Elsa, illustrate the ups and downs of the crypto market. After Elsa freezes the town, the damage seems permanent, and residents wonder if they will have to live in wintertime conditions forever. At the end of the film, Elsa figures out how to control her magic and returns the town to its regular climate.

Lesson: Crypto will one day exit the crypto winter and will once again level out. The key to achieving this stasis may be the arrival of regulation in the cryptocurrency space, which is already be on its way. Today, U.S. Senator Elizabeth Warren unveiled a bill to enforce against crypto money laundering.

Update: Binance has called off the agreement to buy FTX.

If you’ve spent any time reading fintech news in the last 24 hours, you know that Binance has agreed to buy the non-U.S. unit of FTX. For those in the crypto world, this is a big deal. Why? It’s a riches-to-rags story– almost like crypto’s moment of an Enron-like collapse.

The downfall of FTX is part of a long story, which multiple outlets have already covered in great detail. Here are the highlights. FTX is considering a sale because it is reportedly facing liquidity problems. The crypto exchange’s cash flow issue is the result of the devaluation of its digital currency, FTT. The coin is currently trading at just under $3.50.

What happened?

Why has the value of FTT been destroyed? FTX minted FTT to lend to Alameda Research, a quantitative cryptocurrency trading platform founded by FTX owner Sam Bankman-Fried. Alameda Research borrowed stablecoins against FTT, and sent the stablecoins to FTX. This cycle made it appear that FTT was valuable even though it was essentially nothing more than printed money. Alameda Research has reached insolvency and FTX is now worth nearly nothing, despite the fact that investors valued FTX at $32 billion earlier this year.

FTX rival Binance stepped in earlier this week announcing a non-binding agreement to purchase the non-U.S. unit of FTX. If the deal goes through, Binance will be the largest player in the crypto space. “This elevates Zhao as the most powerful player in crypto,” Ilan Solot, co-head of digital assets at Marex Solutions told the Financial Times. “Zhao’s view of the world will matter a lot more, in terms of how he wants to interact with regulators and policymakers . . . the weight of his views will be much more powerful.”

What this means for fintech

• Crypto is down all around
  Cryptocurrencies were having a tough year already. Many outlets were referring to this year as a “crypto winter,” a time during which cryptocurrency values have been depressed when compared to prior periods. This scandal only intensifies this. According to Forbes, “the total market capitalization for crypto has slid to $860 billion in the last 24 hours.”

• Expect more regulatory scrutiny
  Cayman Islands-based Binance and Bahamas-based FTX may be beyond any meaningful regulatory scrutiny. However, this event has caught the eyes of regulators across the globe. Yesterday, in fact, Republican member of the U.S. House Financial Services Committee Patrick McHenry issued a statement imploring Congress to take action. “For years, I have advocated for Congress to develop a clear regulatory framework for the digital asset ecosystem, including trading platforms,” said McHenry. “The recent events show the necessity of Congressional action. It’s imperative that Congress establish a framework that ensures Americans have adequate protections while also allowing innovation to thrive here in the U.S. I look forward to learning more from FTX and Binance in the coming days about these events and the steps they will take to protect customers during the transition.”

• Consolidated industry
  Experts have suggested that crypto wallets will eventually be whittled down to a handful of meaningful players, just as Apple and Android serve as the two main operating systems. If Binance’s acquisition of FTX goes through, the two players will be Binance for non-U.S. wallets and Coinbase for U.S. wallets.

Overall, there are lots of lessons to be learned from this, and more will come as the story develops. Perhaps the top takeaways are the simplest ones. Be ethical. Be honest. Be humble.

Photo by Miguel Á. Padriñán