Orange said it plans to acquire a 65 per cent stake in Groupama Banque and establish a new banking service under the name of Orange Bank at the beginning of 2017.
The France-based operator said it has signed an agreement with Groupama with the aim of developing a 100 per cent mobile banking service. Groupama is to retain the remaining 35 per cent stake.
The transaction is expected to be completed during the third quarter of 2016, and is subject to the approval of the relevant controlling authorities.
Orange first revealed in January that it was in preliminary talks with insurance company Groupama to establish a mobile-only bank under its own brand. At the time, analysts described the move as potentially disruptive for the banking industry.
Indeed, John Delaney, associate VP for mobility at research company IDC Europe, noted that Orange's plan to enter the banking sector would also put it in competition with established banking groups that the operator has partnered with to launch services including Orange Cash.
However, Delaney was largely positive about the move, noting that a mobile-only bank is more in tune with the increasingly mobile-centric way in which people live their lives.
The service will be marketed under the Orange brand within Orange's own distribution network and under the Groupama brand within Groupama's distribution networks. The legal entity will be known as Orange Bank.
The two companies plan to offer services such as current accounts, savings, loans and insurance services, as well as payment. They said their combined ambition is to attract over 2 million customers in France.
Orange CEO Stéphane Richard said that the mobile banking service would also be rolled out in Spain and Belgium, where the operator is also already present.
"This agreement is a major step forward in our ambition to diversify into mobile financial services as we outlined in our Essentials2020 strategy. Groupama Banque will bring an existing banking structure as well as considerable experience in managing customer relations remotely within a banking context," Richard said.
Thierry Martel, CEO of Groupama, added that the partnership enables his company to make use of Orange's technical know-how and expertise in digital services to accelerate its existing online banking activity.
"Through this partnership, we are effectively combining two powerful and complementary brands in order to offer our customers a disruptive banking service. We are aiming to put the high-street bank into our customers' pockets, turning tomorrow's bank into today's reality," Martel said.
For more:
- see this Orange release
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