Pan-European carrier Orange is injecting a EUR 230 million capital booster into its Orange Bank arm, and has agreed to buy out founding partner Groupama’s 21.7% stake in the business.
Orange is gearing up to accelerate growth of Orange Bank, which four years after launch claims a spot as one of the top five neobanks in France, generating a 57% annual increase in Net Banking Income (NBI) in H1 2021. Orange Bank has delivered purpose-built synergies for Orange’s core convergent telco strategy coupled with concrete results for the company’s revenue diversification aims, which target financial services development as a key contributor.
All-In on banking
Orange Bank has ensconced itself at the natural intersection of digital connectivity and digital commerce. Buttressed by its expansive existing distribution network, for every 100 sales linked to mobile telephony, 35 banking sales are made.
Moreover, the average spending in France per Orange customer who has also subscribed to an Orange Bank payment facility has doubled, and in Spain, the attrition rate of Orange customers who have subscribed to the bank products has halved.
These results are a clear consequence of Orange’s strategic blueprints for the bank, which the carrier recognized would require a hefty investment of time, resources and attention in order to lay the substantial framework needed for solid construction. Returns on that investment are clear in reduced management costs, with costs per customer having decreased by 35% over the last three years, acquisition of 40,000 new customers every month – the vast majority opting for a billed service – and more than EUR 1 billion in loans projected to be extended by the end of this year.
A laser focus drives Orange Bank results
Orange wasn’t the first international telco to train its sights on financial services as a highly complementary potential growth engine, but it has become one of Europe’s most focused.
From its inception Orange Bank was conceived as a convergence driver, exploiting the opportunity to cross-leverage Orange’s established carrier capabilities and expertise with the swift ongoing shift to digital and mobile commerce as a primary channel for consumer finance, payments and banking.
A bet on further success
Orange has banked on financial services success, backed by firm commitment and steady execution. The company’s vast Orange Money operation boasts a steadily growing base of active users that stood at 22.6 million across 18 MEA countries in Q2 2021.
Its more selective deployments including France and Spain have now been extended with Orange Bank Africa and are planned for launch across the rest of Orange’s European footprint by 2025, seeding the ground for further financial services cultivation.