Following the success of ‘Orange Money’ in the MENA region and its recent status of majority shareholder in Groupama Banque, the French telecommunication giant will offer from the beginning of next year a 100% mobile banking service that reflects the changing consumer behaviour and preferences
Orange plans to make a transition to become a bank in France © BBN
Orange’s newly acquisition Groupama Banque will be renamed Orange Bank in January 2017 and will mainly target mobile users after getting the approval from regulatory bodies in Europe and France. How will the telecom firm disrupt mobile banking and can it maintain its competitive advantage? Orange is ready to strike as it intends to convert two million mobile subscribers to its new digital banking facility. Orange’s expertise and know-how in robust digital system will be essential to go beyond online banking applications that are currently available on smartphones. The company aims to transform users’ mobiles into a virtual bank that is always at hand.
This is a brilliant move, as leading telecommunication firms continue to push into more services, with payments and now banking being obvious adjacencies. The telecoms giant’s main objective is to reach £400 millions euros of revenues in financial services in 2018. Other European markets such as Belgium and Spain will be added later. The service will use Orange’s network of stores as well as Groupama’s own branches and those of its subsidiary Gan. Orange’s technological leadership and the ubiquity of mobile phones will enable them to move forwards, faster and further, to create a bank that factors in all responsibilities and the fluidity that is inherent in today’s technology.
Mobile banking is viral with electronic and mobile communications devices becoming a new interface for storing, spending, paying and keeping track of money. Goldman Sachs analysts predict that a digital banking era is on the horizon and will take over soon. Indeed, according to a study established by ING, 16% of retail banking customers will switch to mobile banking in 2017. What makes Orange bank attractive is not technology and marketing, but capital. Mobile banking is gathering momentum with nearly half of European active smartphone and tablet users. Telephone companies such as Orange are under extraordinary pressure to leverage their customer bases, hence the reason behind the inception of a digital bank. The company strives to improve customer satisfaction by building a strong brand, which embodies key values such as security and reliability and solid distribution network, necessary to maintain the trust of more than 28 million clients in France. Mobile phone payment services are deemed vital to maintain the growth of the telecommunication giant. The new electronic platform will enable its customers to experiment a reliable mobile banking experience as every single transaction will leave an electronic trail, which can be traced securely if money is lost or stolen.
Today, banks are at a competitive crossroads. The conventional intra-industry consolidation that has preoccupied the telecom and banking sectors for the past few years will run its course, atypical communications and financial services partnerships, aimed at creating new forms of competition, will accelerate. Last year, in Europe, telecommunications and financial companies joined at a rate of one alliance a month. Although the first generation of online financial services was disappointing, the second generation will be far better. This time, more effective technologies will fundamentally alter how telecom firms operate — in ways that benefit both customers and businesses.
Now, the new contenders in financial services are telephone companies, specifically wireless telecoms, such as Orange, aim to provide content that will generate sufficient revenue to bring them a return on their investments in infrastructure. The company believes that financial content is well suited in smartphones. Even though the screen is not as easy on the eyes as an ATM or a computer monitor, it is still large enough for consumers to check balances, pay bills, move money among accounts, and perform just about any other routine banking transaction. As Artificial Intelligence and 5G wireless technology are developing, accomplishing such tasks on a mobile device will become even much better and easier.
Badr Berrada is a tech entrepreneur & international best-selling author. As a Founder & CEO of BBN Times, he manages a team of more than 150 renowned industry experts. He has been featured in renowned publications such as Forbes Magazine, Yahoo! News, Thrive Global, Irish Tech News, Herald-Tribune and IdeaMensch. He co-authored The Growth Hacking Book: Most Guarded Growth Marketing Secrets The Silicon Valley Giants Don’t Want You To Know, The Growth Hacking Book 2 : 100 Proven Hacks for Business and Startup Success in the New Decade and Innovating at Ten. Badr holds a master's degree in Economy, Risk and Society from the London School of Economics and bachelor degree in Finance from Cass Business School.