Chat is the new Super App

Exploring the potential of conversational interfaces!

Based on https://flic.kr/p/5UjYds

Revolutionizing the Super App Landscape with GenAI-Powered Chat Interfaces

The most famous Super Apps (https://en.wikipedia.org/wiki/Super-app) are mainly around communication, transportation, delivery, and financial services (WeChat, Alipay, Grab, Gojek, Careem, and Paytm). As APAC is leading the pack Americas and Europe are still lacking behind. The estimated market size for 2023 was $78.16 billion and the forecast for 2033 is $887.3 billion (see https://www.futuremarketinsights.com/reports/super-apps-market). The potential for Super Apps is huge and let’s use the momentum created by the rise of conversational UIs based on GenAI to gain a share.

With most of these chat systems having an open, ‘plug-in’ extensions mechanism for application-and subject matter specific contents and actions, it becomes interesting to provide application services through the chat system. This renders a chat system into an unexpected, but undeniable Super App (see https://www.capgemini.com/insights/research-library/technovision-2024-prompt-the-future/).

Let’s have a closer look at possible scope based on typical common features:

• Communication: Connect with others through messaging, voice, and video.
• Financial Services: Manage finances & insurances, make payments, and access banking services.
• Transportation: Book rides, plan routes, and track vehicle locations.
• Booking: Reserve flights, hotels, restaurants, and events seamlessly.
• Services: Access on-demand services like food delivery and home services.
• Public: Access government services, utility payments, and community resources.

The scope is not limited to a specific sector or domain. Most of the times it’s even touching more than one of those and that shows the full potential of this approach.

To illustrate let’s imagine two examples:

Public: Ordering a parking permit.

User: I just moved to Stuttgart Hermannstrasse 2 and I need a parking permit for my car.

Chatbot: The parking permit in Stuttgart West is 40€ per year. For booking I need your license plate and a start date. Payment is possible by credit card or PayPal.

User: My Licence plate is “S — TH 84” and I need the permit starting from 1.5.2024 for 1 year. Please use my Paypal account for payment.

Chatbot: I ordered a parking permit for your car starting from 1.5.2024. Please check your emails (aa@bb.com) for confirmation and the delivery of the badge.

Booking: Booking a trip including accommodation to a concert.

User: I want two tickets for the Red Hot Chilli Peppers tour in Germany preferable nearby Stuttgart.

Chatbot: The concert in Stuttgart is sold out, but you still can get tickets for Munich (15.8.2024) or Frankfurt (19.8.2024). Price for one ticket is 100€.

User: Frankfurt is OK, but I would need a hotel room for two after the concert, close to the concert hall.

Chatbot: The HolidayIn 800m away has a room available for 80€ without breakfast.

User: Please book two tickets and the room. Payment shall be settled via my credit card.

Chatbot: All set: tickets 200€ and hotel 80€, please check your email (aa@bb.com) for the online tickets and the hotel confirmation.

These are only two simple examples and for sure there are much more possible Use Cases from all sectors. Now let’s have closer look on the technology you will need to implement the chat based Super App:

LLM based Chat System (including NLP, Agents)

GenAI-powered conversational agents or chatbots can handle a wide range of user queries and tasks, providing instant assistance and support within the Super App. This can reduce the workload on human agents and improve customer service efficiency. Established products are: Dialogflow from Google, Microsoft Bot Framework, Amazon Lex, and Rasa (OpenSource). Be aware that you need to take care of the fine-tuning the model and LLM on regular basis. The necessary data can come from own user transactions or public available and license-free content. In addition, a RAG approach to embed local documents in a vector database will help to localize the conversation. Cleanup and training are essential for a well working chat system.

Services & Service Integration

Identify the various services within your Super App ecosystem that the chat system needs to interact with. These could include payment processing, booking services, content delivery, user authentication, and more.

Generally speaking, services can be divided into three categories:

• Services that you own and implement.
• Partner services that you use in conjunction with them.
• Ecosystem services that you use without any collaboration/commitment.

Develop APIs or microservices for each service to expose their functionalities to the chat system. Ensure these APIs are well-documented, secure, and scalable. Integrate the chat system with these services using API calls or webhooks. Handle authentication, error handling, and response parsing within the chat system.

Service Orchestration

Implement a service orchestration layer within the chat system to manage the flow of conversation and coordinate interactions with multiple services.

Define conversation flows or dialog trees that map user intents to appropriate service calls and responses. Consider using state machines or conversation graphs to model complex interactions.

Handle context switching and maintain conversation state to provide a seamless user experience across multiple interactions.

Digital Identity Management

Managing digital identities as part of a Super App implementation involves ensuring secure and seamless user authentication, authorization, and identity verification processes. Develop or buy a system for managing users’ digital identities securely. This includes storing user data in encrypted databases, implementing access controls to restrict unauthorized access, and regularly auditing user identity data for accuracy and compliance.

Multi-Factor Authentication (MFA) is a must. This may include one-time passwords (OTPs) sent via SMS or email, biometric authentication (fingerprint or face recognition), or authenticator apps.

On top identity verification measures such as Know Your Customer (KYC) procedures are a best practice. This may involve collecting additional information and verifying users’ identities using government-issued IDs, utility bills, or other documents.

Finally, compliance with relevant regulations governing digital identity management, such as GDPR, CCPA, and PSD2, are mandatory.

Digital Wallet

A Digital Wallet is needed to store and manage digital assets like credit cards, PayPal account, cryptocurrencies, or loyalty points. For a Super App you it’s important to offer several different assets as in the service landscape different options are needed and the base for convenient usage. The wallet and its data is shared across an entire ecosystem of services. While that makes it more convenient, there are serious implications for user data privacy.

The digital wallet needs to be integrated with payment gateways to facilitate transactions. This involves partnering with banks, payment processors, and other financial institutions to enable users to add funds to their wallets and make payments securely.

Partnerships with merchants, service providers, and other apps are helpful to expand the utility of the digital wallet. This may involve integrating with e-commerce platforms, utility bill payment services, and more.

Ensure compliance with relevant financial regulations and data protection laws. This may include anti-money laundering (AML) regulations, and Payment Card Industry Data Security Standard (PCI DSS) compliance.

Monitoring and Analytics

Set up monitoring and analytics tools to track usage metrics, user interactions, and system performance. Monitor key performance indicators (KPIs) such as response times, conversation completion rates, and user satisfaction scores.

Use analytics data to identify bottlenecks, optimize conversation flows, and improve the overall user experience of the chat system.

Operations

Distinguish between technical and business operations. From a technical perspective, you need to address non-functional requirements around performance, reliability, and availability. If you are targeting a large user base, you will need the right setup for this (preferably in conjunction with a hyperscaler). In addition, special emphasis must be placed on training the chat system and LLM, as this can be very costly. Setting up proper FinOps and using specialised hardware (e.g. NVIDIA) is strongly recommended.

From a business perspective, customer service is important. A proper unified customer support platform must be based on chat, but should also offer all other channels (email, social media and even phone) in a 24/7 approach. Personalised support is possible thanks to the huge amount of user data available and should be used. Voice of the customer input for continuous improvement and even new business services will help to evolve the Super App. Ultimately, it’s all about speed to resolution and putting the customer first.

Error Handling and Recovery

Implement robust error handling mechanisms to gracefully handle errors and exceptions during service calls or NLU processing. Provide informative error messages to users when something goes wrong and guide them towards resolving the issue or contacting support. Implement fallback strategies, such as suggesting alternative actions or asking clarifying questions, to recover from errors and keep the conversation flowing.

By following these steps, you can build a chat system within your Super App that effectively processes natural language input, orchestrates interactions with multiple services, and delivers a seamless and intuitive user experience.

Mastering the technology and implementing a conversational, easy to use Super App is comparatively simple. The trickiest part is to onboard, convince and keep the users within the ecosystem/Super App.

What are the biggest challenges?

Trust

Super Apps are a perfect target for hackers because they connect several existing services and use a unique profile, including financial data. Thus, trust is paramount, so users need to feel confident in its security measures. Ensuring data security, privacy and regulatory compliance builds trust and is mandatory for Super Apps.

On the other hand, data privacy is something that at least in Europe is very important. Especially in Germany where I’m based this is taken very seriously and a lot of potential users fear to be a transparent customer with negative side effects. Ensuring robust data privacy measures builds trust among users and mitigates the risk of data breaches or misuse. This includes obtaining user consent for data collection and processing, anonymizing sensitive data whenever possible, and providing users with control over their privacy settings.

How to gain trust?

The combination of several measures is recommended to gain the trust of the Users. This is an ongoing topic and needs to be part of the DNA of the team. The following measures can help to gain the trust of the users.

First, ensure compliance with data protection regulations to maintain or gain user confidence. As a positive side effect, you can avoid legal consequences. Fraud detection and prevention mechanisms are key to safeguard against identity theft and unauthorized access. This may involve monitoring user activities for suspicious behavior, implementing transaction limits, and using machine learning algorithms to detect fraudulent patterns. Finally, you must conduct regular security audits and penetration testing to identify and address vulnerabilities in the digital identity management system. Stay informed about emerging threats and security best practices to keep user data safe.

User Base

A large user base is essential for a successful Super App. You’ll gain network effects, which increase the apps overall value with more users. A sizable user base enables better insights into user behavior, facilitating innovation and personalized experiences. It also creates opportunities for ecosystem expansion based on the different possible interests on services of a huge user group. Ultimately, a large user base is foundational for realizing the full potential of a Super App.

How to build a User Base?

To build a large user base for a Super App, focus on delivering a unique value proposition that resonates with your target audience. Put the client in the center of everything! Optimize user experience and streamline onboarding processes to ensure ease of use and adoption. The easier the better and the chat-based interface can be very simple! Execute targeted marketing campaigns and incentive programs to attract and retain users effectively. Foster ongoing engagement through personalized communication and exceptional customer support. Gamification, prizes, and loyalty programs are measures to attract and keep users. Continuously gather feedback and iterate based on user insights to refine your app and drive sustained growth.

Regulation

Regulations pose challenges for Super Apps due to varying requirements across jurisdictions and the complex nature of their services. Compliance with regulations like GDPR, GXP and CCPA demands a special focus. Financial regulations also apply to Super Apps offering services such as digital payments and lending, requiring adherence to licensing and risk management standards. Market entry barriers can arise from regulations restricting ownership and service offerings, potentially disadvantaging Super Apps against traditional competitors. The combination of several different industries can lead to conflicts and high efforts.

How to adhere to mandatory regulations?

Most importantly you need to understand the relevant regulatory requirements for your Super App. Based on this it’s mandatory to develop a compliance policy and matching procedures. You must monitor and audit those on regular basis. Besides that, you are forced to react to all regulatory changes and on top you need to adjust your polices on each and every additional new service which you are connecting. A best practice is to also engage with regulators to seek for guidance, clarify requirements and address the compliance concerns early. Please keep in mind that if you are not compliant with the given regulations your Super App will get banned or removed from the respective market!

GenAI impact

Using a GenAI based Chat system as the heart of a Super App will impose several other challenges that need to be addressed:

• Ethical and Privacy Concerns: Ensure that GenAI usage aligns with ethical guidelines and privacy regulations, particularly concerning data usage and user consent.
• Quality and Accuracy: GenAI-generated responses may not always be accurate or contextually appropriate, leading to misunderstandings or frustration among users. Continuous monitoring and refinement are necessary to maintain quality standards. Let the User always confirm before you take actions.
• Training Data Bias: GenAI models trained on biased datasets may perpetuate or amplify existing biases in their responses. Careful curation of training data and model evaluation are crucial to mitigate bias risks.

Conclusion

By harnessing the power of GenAI, chat-based super apps can deliver a seamless and intuitive user experience, unlocking the full potential of this approach. Intuitive usage and an ever-increasing number of services to be integrated are the basis for sustainable growth.

The implementation of such a system requires a combination of technologies, including natural language processing, service integration, digital identity management, and a digital wallet. The ingredients are all available and one must only start implementing.

The challenge will be to ensure compliance, build trust with users and grow a large user base that needs to be catered for.

No need to wait, start now building your chat-based Super App!

If you are curious about other trends, take a look at Applications Unleased Container as part of Technovision 2024 (see https://youtu.be/vBMCxgIB8SE?si=lNDTWPALsGicdaX3).