Orange goes all in for mobile banking
Telecommunications operator Orange is strengthening its commitment to mobile banking with a capital increase of 250 million euros to Orange Bank and the acquisition of its partner in the field of banking insurance Groupama.
With 1.6 million customers in France and Spain, Orange Bank is now one of the five largest newly established banks in France, already counting four years since its creation.
The bank claims that every month it adds more than 40,000 new customers, and by the end of 2021 it is set to provide loans amounting to 1 billion euros.
While the majority of startup banks continue to implement a free usage model, over 90% of Orange Bank’s new customers sign up for a fee-based service.
Orange adopts a product model based on convergence of telecommunications and finance. In France, of course, the average expenditure per customer who has also registered with an Orange Bank payment service has doubled.
In addition, for every 100 sales associated with mobile telephony, there are 35 bank sales.
In Spain, however, the withdrawal rate of Orange’s customers who have subscribed to Orange Bank’s offer has been half.
Although not yet profitable, Orange reports that the bank is moving towards balancing expenses and revenues, thanks to a 57% increase in net bank income in the first half of 2021 compared to the first half of 2020, and a 35% reduction in management costs per customer since 2018.
The company intends to develop its service portfolio through partnerships with fintechs. Following the acquisition of France’s neobank Anytime in the field of professional SMEs and the signing of a strategic partnership with Younited for credits, Orange states that a tendering process for new insurance offers is underway.
The value of the deal to acquire 21.7% of Groupama’s stake has not yet been disclosed, although both will maintain a commercial relationship until 2018.