While banks have been able to remain open since March 17, the official date of confinement in France, customers have been encouraged to favor paperless exchanges. Some of them seem to have taken a liking to it, and even plan to adopt these new uses after the crisis.
The French prefer online services
Confinement has led the French to experiment with new ways of exchanging, working and consuming. Many observers believe that this period will see an acceleration in the use of digital goods and services, an outlook that applies particularly to retail banking. A recent survey by Boston Consulting Group (BCG) shows that 7% of French people have taken up mobile or online banking in recent weeks. One in five users now plans to limit or even stop visiting branches once the crisis is over, a figure that should prompt traditional banks to think about a new organization and accelerate their digital transformation.
Possible acceleration of bank branch closures
Between 2009 and 2016, almost 15% of French bank branches disappeared, according to the French Banking Federation (FBF). Between 2016 and 2020, the number of branches could fall from 37,261 to 32,500, according to a study by Sia Partners. This trend is mainly due to abnormally low profitability andchanging consumer habits.
Although the rate of bank branch closures has been lower in France than in other European countries (3% of branches closed between 2014 and 2018), the health crisis could accelerate this trend or prompt establishments to create new formats.
What does the future hold for online banks and neobanks?
Online banks, most of which are not yet profitable, are hoping to capitalize on the Covid-19 crisis. A recent study conducted by Next Content on behalf of CGI revealed that 22% of French people currently hold at least one account with a branchless bank. Only 7% of these customers have taken the plunge by domiciling their income or savings there. To convince their customers once and for all, the 100% online banks are stepping up their efforts. Boursorama Banque, for example, offers users the opportunity to sign a bank mobility mandate in its favor, combined with a bonus.
As for neobanks, the current crisis has demonstrated the fragility of some of the players who have recently emerged and tried to carve out a place for themselves in this market. Among them, Morning and C-Zam are already considering throwing in the towel. To convince customers to place their trust in them, these players will have to strengthen their legal arsenal or obtain banking authorizations.