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Online banking launched by Orange Telecom

FinTechs aren’t the only ones giving traditional financial institutions (FIs) a run for their money. In France, a telecom giant is hoping to capture a full 25 percent of the country’s online banking market with its new bank launching tomorrow, Nov. 2 — and that’s just its 10-year goal. Orange Bank told Reuters that it was targeting two million clients in that 10-year window.

“But I hope we will not stop there … and we will be the market leader in several years,” Orange Bank CEO Andre Coisne said.

Those are big dreams for the first telecom company to start its own bank (at any rate, there isn’t a successful precedent in major Western markets), but it does have potential. More and more consumers are using their smartphones for banking activities, and FIs that don’t offer that technology are finding themselves at an increasing disadvantage.

Orange may be new to the banking arena, but its CEO isn’t – Coisne has launched online banks in France for ING Direct and Credit Agricole’s BforBank. And Orange is no stranger to financial services either, with Orange Money, Orange Cash, and Orange Finanse providing services in Poland and much of Africa over the past 10 years.

In Africa, about 12 percent of adults have a mobile money account, compared to 2 percent globally – making it the world leader in mobile banking. Telecom operators have attempted to replicate this success elsewhere by partnering with existing banks, but gimmicks like offering free music streaming through Spotify or free movie streaming through Netflix have failed to make customers stick.

By comparison, banking services are “essential and sticky,” a minority investor told Reuters, potentially representing a steady and reliable revenue stream for the telecom giant as it seeks to offset infrastructure investments.

So far, only 25,000 Orange customers have shown interest in Orange Bank, out of 21 million using its mobile service. However, online banking in France is expected to grow six-fold to 17 million users over the same decade in which Orange Bank hopes to achieve growth, so the timing may be perfect.



Source: https://www.pymnts.com/news/international/2017/orange-online-banking-to-give-french-fis-a-run-for-their-money/

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