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Fintech: The Banks Strike Back

Fintech: The Banks Strike Back

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Fintech: The Banks Strike Back

158 pages
2 heures
Sep 20, 2018


Following taxis, hotels, and supermarkets, banks are now part of the industries bound to be disrupted. Hindered by cumbersome branch networks, dragging late behind digital trends, abhorred by many of their clients, our good old banks should worry quite a bit...

Has the final word been spoken? Not so sure. Banks still have a few good cards to play... as long as they hurry. Startups, tech giants, telcos: the banking fortress is under attack from all sides!

Engaged and visionary, this book shows how traditional banks are both striking back and reinventing themselves thanks to fintechs.
Sep 20, 2018

À propos de l'auteur

Yves Eonnet is the CEO and co-founder of TagPay, a fintech accompanying banks in their transition from a 50-year-long cycle of traditional core banking system to the new digital banking system. He worked for 10 years as Head of Innovation at Schlumberger/Gemalto on the adoption of smartcard technology by Visa and Mastercard. He is therefore a recognized expert of electronic transactions.

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Aperçu du livre

Fintech - Yves Eonnet



In this book, Yves Eonnet and Hervé Manceron share their vision of how banks are being reinvented under the influence of Fintechs.

This reinvention is a means of striking back, they tell us. We have not heard the last of the banks, far from it! And it is an intelligent response… since this reinvention is not necessarily taking place against Fintechs. It can also happen with them. Accordingly, within this constructive collaboration approach and win-win relationships, they stimulate, challenge and drive the banks to reinvent themselves faster and to develop more rapidly differentiating services for their customers. This is the route we have followed at Société Générale and our collaboration with the Fintech TagPay is a good illustration.

Today, our customers want an omni-channel, smooth and seamless experience. They want to be free to choose when and how they enter into a relationship with their bank. Digital technologies are opening up new opportunities; they allow us to offer better services that are simpler, smoother and more personalized, as well as to automate certain tasks that have no added value, and all of this at a lower cost. The aim is to better meet the needs of our customers, since the only issue that should concern us is providing them with added value. In this effort to improve the customer experience, banks and Fintechs strike me as being more like natural partners than competitors.

Start-ups undeniably have the necessary agility and speed to be disruptive, they bring the ideas and the ability to create new products and services very quickly. Meanwhile, banks have built sustainable and trusted relationships with their customers, who in the large majority of cases and despite a certain appetite for more advanced banking technologies, choose to maintain a relationship with their traditional bank rather than seek an alternative. Moreover, banking institutions benefit from expertise acquired over many years, banking networks enabling the distribution of new products, as well as the ability to gain economies of scale. Finally, in terms of data security and protection, banks unquestionably remain a trusted partner for their customers.

Whereas partnerships are beginning to develop between start-ups and banks in Europe, Africa is inventing its own way of using banking services. Its own approach. This is due primarily to the remarkable rise of mobile phones: by 2020, half of Africa’s population is expected to have a smartphone, representing 650 million mobile phones. With this revolution in mobile banking, we can observe a real Africanization of banking practices. The situation has enabled Africa to skip certain stages and so have rapid access to banking services that are both intuitive and secure.

For a bank such as Société Générale, well established in the continent for a long time, I fundamentally see in Africa a strategic long-term opportunity, as well as an important and extraordinarily motivating responsibility to support the growth of this continent. Generally speaking, in Africa there are some extremely interesting things taking place from an innovation perspective. To capture them and be inspired, we have for several years adopted a local and open approach with African innovators, forging increasingly close links with them. For example, two years ago we created an Innovation Lab in Dakar, in Senegal. We have successfully built trusted relationships with start-ups, developing projects with them that can be both very simple in terms of their principle yet bring about major advances. Thanks to these relationships, as well as our partnerships with Fintechs such as TagPay in particular, we are in the process of designing a new kind of mobile bank. An alternative model that will enable us to address one of our main challenges in Africa, i.e. a level of access to and usage of banking services which is today too low (under 20% in many sub-Saharan African countries).

In the following pages, Yves Eonnet and Hervé Manceron talk about the future of the banking industry and the closely linked destinies of banks and Fintechs; the constraints that banks must overcome to be among the winners of the new banking landscape; of this Africa - a genuine innovation laboratory - which paves the way for the future of banks in a world combining numerous new technologies.

Their very pertinent analysis reinforces for the reader the belief that the bank of tomorrow will have to take advantage of digital technologies to improve and secure the user experience, while at the same time strengthening its capacity to advise customers, whether individual or corporate, in need of added-value solutions. In short, the challenge is to succeed in innovating by reconciling the best of both worlds, human and digital. And to adapt as much as possible to the needs of our customers, according to their banking maturity.

Banks and Fintechs need each other now more than ever to continue to evolve and redesign the bank and financial industry of tomorrow. To exist side by side as partners of the positive transformations of our world.

Enjoy the book!

Frédéric Oudéa

Directeur Général de Société Générale


The bank in 2018:

death on credit?

The bank? It’s doing fine, thank you. In 2015 the six largest French banks (BNP Paribas, Société Générale, Crédit Agricole, BPCE, Crédit Mutuel and Banque Postale) had almost returned to their pre-crisis levels and saw profit to the tune of 22.9 billion euros. In 2016, they did even better (23.5 billion euros of accumulated profit).

There is cash in abundance, the customers are still there (52 million customers in the Crédit Agricole group, over 30 million in BNP-Paribas, Société Générale or in the BPCE group...), and together they employ a total of over 370,000 people in France. Financial giants for whom the subprime crisis had about as much impact as a mosquito bite...

Yet, in the corridors of the management floors there is another tune to be heard. Transformation going hand in hand with digitization, branch in opposition to agile, and the future does not seem quite so serene. If, at the moment, all the short-term indicators are green, those that provide a glimpse of the future for banks are amber instead...dark amber. Giants? Yes, but with feet of clay.

A fractured business model

Historically, the revenues of western banks have been based on two pillars: interest rates and fees. For example, the former represents over 60% of Crédit Agricole's income (the green bank is the most prominent of all in the credit professions). The latter contribute between 15 and 40% to Net Banking Income, according to the French institutions. Other sources of revenue, such as those generated by market transactions, are cyclical and are relatively small.

But these two pillars are seriously fractured. The low level of interest rates is no longer a novelty, but a constant to which the banks must adapt. Not only are they low everywhere (0.47% for long-term rates in France, 0.93% in the euro zone, and even...-0.07% in Japan), but, apart from the United States where they are stable, they are continuing to fall: -82% in France, -69% in the euro zone, -32% in the United Kingdom over the last five years. It’s complicated making a living under these conditions...even if the big central banks (such as the FED and the ECB) decide to raise the base rates, the loans will no longer pay as they did before.

This becomes all the more notable as the banks' safety net (fees on transactions) is also showing signs of weakness. The ever-increasing competition between the established players, the inevitable arrival of new types of players, and the evolution of consumers will inevitably result in charges that will often not be understood by customers already under pressure. We’ll return to this topic later. The analysis, in any case, leaves little doubt: with so much uncertainty about their model, banks do not have many options. Reduce their costs, find new sources of revenue, or more probably both.

The transformation has already begun

For those working in one of these large financial institutions, the prognosis may appear exaggerated, even unfair. Recent years have indeed been characterized by a major transformation of the sector. With, in particular, social impacts that we can still only speculate about.

The most visible aspect? The symbolic -and continuing-decline in the number of bank branches.


The subprime crisis triggered this trend. But while many banks have raised their heads again since then, the pace of branch closures continues to pick up year on year. 2016 was the worst year of the decade, with 9,000 fewer establishments.

Our French banks, which are apparently so healthy, are no exception. Banque Populaire and Caisse d'Epargne had already brought down the curtain on 160 branches in 2017, and another 400 will close by 2020. The Société Générale plans to reduce from 2,000 to 1,700 branches over the next three years. As for

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