IBS Journal: The iconic monthly FinTech magazine

February 2020 issue out now! Subscribe now

Launching India FinTech Report 2020

Market sizing and forecast of Digital Lending, Payments, WealthTech & RegTech. Subscribe now

Leading Back Office Systems for Banks

In-depth Supplier Profiles and User Lists. Subscribe now

In-depth Banking Tech and FinTech Research

Over 300 research reports that's updated quarterly. Subscribe now

The big interview: Orange Bank’s Marc Rennard

Orange is taking a 65% stake in Groupama Banque and launching Orange Bank in France next year. Marc Rennard, Deputy CEO, Customer Experience and Mobile Banking, tells Scott Thompson why the time is right for the mobile-only new entrant

ST: I understand you were in discussion with three banks. Why did you choose Groupama Banque?
MR: We assessed proposals from several banking partners for around six months before deciding on Groupama. Primarily, we were looking for strategic alignment with ourselves in terms of developing a disruptive banking strategy. Secondly, we were looking to manage value creation and customer experience from an end-to-end point of view; that was possible with Groupama Banque. In the end, Groupama Banque was selected for the quality of its business processes and its IT infrastructure and, ultimately, for its commitment to building a long-term strategic partnership with us. They want to place the customer at the heart of the service offering, which is very much in line with Orange’s ambition to deliver an incomparable customer experience.

ST: This is a big step forward in Orange’s plan to diversify into mobile financial services as outlined in the Essentials2020 strategy. What are your immediate ambitions in terms of the launch in France?

MR: Indeed, the focus today is on launching this initially in France and we intend to roll-it out to other European countries thereafter, the first one being Spain. We plan to launch the banking service in France at the beginning of 2017. We cannot be more specific on the launch date at this time.

Primarily, what we wish to do is to create a simple and transparent banking experience. It will be mobile-driven and distinctive in terms of price and customer-focus. Orange Bank will combine the best of mobile banking (services and innovative products at competitive prices) with the reassuring side of Orange’s physical network and security capabilities.

When we launch in France, the service will be marketed under the Orange brand within our own distribution network and under the Groupama brand within its distribution network. The combined ambition for the two groups is to attract over two million customers.

ST: You’re looking to take on France’s traditional banks with a disruptive service. What makes you feel that French customers are hungry for change? In the UK, for instance, there is still a lot of apathy in terms of switching current account providers.
MR: What we have noticed is that there is a big change in France in terms of the relationship between the customer and the bank – and today, people are less satisfied with the traditional banks and, subsequently, less loyal. We also see a huge trend in the adoption of mobile as the primary mode of interaction with the bank, over visiting the branch.

Also, another disruptive factor, in France at least, is that regulation is attempting to make it easier for people to move from one bank to another. For example, the French government has launched a portal that allows people to compare banking prices. We also see that some traditional banks in France are slow to adapt to the digital era and what customers are asking for in terms of easy access to services 24/7 via their mobile devices, affordability, transparency and ultimately a great customer experience.

ST: What key advantages do you have over the traditional banks?
MR: We believe this is the right time to launch a mobile bank and Orange strongly believes that we have the right assets in place to succeed in this market. Firstly, we have a strong, globally recognised brand which is highly trusted for security and reliability – key attributes in this field. And when we conducted our own survey, 35% of respondents indicated that they would be happy to bank with us.

Secondly, we already have an extensive retail network in the form of our shops, that, although we have no intention of turning them into banking branches, will be very efficient in terms of acquiring new customers. Our shops will complement the mobile subscription service, reassuring customers through a bricks and mortar presence. We also have considerable know-how in marketing and technology.

Thirdly, we will leverage our strong partnership with Groupama, which shares the same vision about the evolution of the market. Orange will leverage its brand, its customer base, its branches, and we will provide the right apps for the right services, aggregating FinTechs that we have already developed relationships with through our Orange Digital Venture initiatives and Orange Fab startup accelerator programme.

ST: What value propositions can you bring to customers?
MR: As mentioned, we have no intention of turning our retail shops into banking branches but they will act as very efficient acquisition tools. At launch, account opening will be possible in 150 shops, where employees will receive dedicated IOBSP training. Orange wants to create a simple and transparent banking experience. It will be mobile-driven and distinctive in terms of price and customer-focus experience.

Orange Bank will combine the best of mobile banking (services and innovative products at competitive prices) with the reassuring side of Orange’s physical network. At this stage we do not wish to provide details about the propositions which will be saved for the launch. However, two examples of topics we are looking at: Improving the customer experience, overall, but in particular around payments. At the moment, we see that no one is really aggregating the services – P2P, NFC etc. We will seek to facilitate the existing payment issues.

And simplifying and making loans and credits for our customers more transparent. Today, the savings market is still very complex and we think we can improve it and even make it more ‘fun’ for people, whilst removing the stigma. But ultimately, we believe that by making customers’ lives easier, cheaper and more efficient, we will be successful in this market.

ST: Orange already offers financial services in the Middle East and Africa via Orange Money and Orange Finanse in Poland. Could you give an update on how these services are faring and the knowledge gained that can be brought to the launch of Orange Bank?
MR: Our mobile money offering for the African continent and the Middle East, where we have a large operational presence, is based on payment services under the Orange Money brand. It is still very much a growing business. Today Orange Money is available in 14 countries and we have nearly 18 million customers which represents a 34% year-on-year growth. More than five million of them use the service on a monthly basis. We believe that there is still plenty of room for growth.

At the moment, we offer three types of transactions including money transfers, with the ability to make electronic money transfers internationally and even transfers to customers of other operators; payments, whereby users can pay certain bills remotely and easily buy phone credit; and financial services including savings and insurance solutions, depending on the country.

We also see an opportunity to extend the ecosystem including operating ‘corridors’ to and from Africa, as we are doing by opening up Orange Money services in France to serve the diaspora. We will take this to other European countries in due course. Overall, the success of Orange Money has given confidence to Orange as a Group to invest further in mobile financial services.

In Eastern Europe, where we have launched Orange Finanse, it is a very different market to Africa and also to Western Europe. Every country is very specific. And because the regulation in banking is very country-specific we have to find local partners. That is why in Poland with Orange Finanse we decided to launch our mobile bank as a partnership with m-Bank.

In France, the market is highly regulated and therefore we need a licence to be a bank. That is something that we get through the stake in Groupama. In France, as well as other Western European markets, it is important to move beyond payments in order to be profitable. The banking licence allows us to extract value. That is why we decided to acquire a bank in order to serve customers on all other areas; credits, loans, savings and current accounts, for example.

By Scott Thompson

Related Posts