Orange’s digital bank hits 500,000 users in Cote d’Ivoire – further roll-outs planned
30 April 2021
Orange Bank Africa was launched last year in Cote d’Ivoire and is already beginning to attract customers. Russell Southwood did an email Q and A with a member of the Orange mobile financial services team to find out how it works and what’s planned.
Q: When Orange launched its digital bank in France what was the strategic rationale for this move?
A: Orange affirmed its ambition to diversify into mobile financial services at the launch of our Essentiels2020 strategic plan back in 2015. This consisted of concentrating our efforts particularly on mobile banking as it offered significant growth prospects. This diversification was part of a favorable context that continues to be characterized by three major factors : the explosion of mobile uses, an increase in interactions via mobile between customers and their banks, and the evolution of the mobile and banking markets towards digitilisation.
The commitment to diversify into mobile financial services was reinforced with the launch of the Group’s current strategic plan "Engage2025", launched in December 2019, with mobile financial services highlighted as one of the Group’s priority growth areas.
This diversification into mobile financial services originally began over 13 years ago with the launch of Orange Money in Côte d'Ivoire, and in 2017 with the launch of Orange Bank in France, followed by Spain in 2019. Recently, 2020 marked the launch of Orange Bank Africa in Côte d'Ivoire. In the meantime, Orange Bank in France continued to grow with the acquisition in December 2020 of Anytime, a neobank for companies, professional associations and freelancers. Already available in France, Anytime services will be gradually rolled out to the bank’s other operating countries in Europe.
Our objective is to provide our customers with innovative banking products and services, with strong synergies with the telecoms business, in Europe and in Africa.
As a globally recognized brand, Orange holds key attributes such as security and reliability. Tests conducted with Orange customers showed that the brand offered legitimacy in banking as the Group is perceived as a trusted player with a strong proximity to its customers, two assets cited by customers in the choice of a bank.
As an operator, Orange also holds a strong knowledge base of its mobile customers, and has vast experience and expertise in handling a high volume of interactions with customers, with a number of touchpoints for customers across different channels such as online, via mobile as well as in stores across both Europe and Africa.
Q: Why was it seen as important to launch the digital bank in Sub-Saharan Africa?
A: The question for Orange has always been about how to best shape the development of our mobile financial services business since the launch of Orange Money in Côte d’Ivoire in 2008.
Identified as a major avenue for growth, mobile financial services constitute a priority area of diversification for Orange, focused around two activities: on one hand, a money transfer and mobile payment service (Orange Money) and on the other hand, a banking solution (Orange Bank Africa).
Regarding Orange Money, there are three main prongs of service:
- a simple and secured offer for cash deposits and withdrawals, money transfers, bill payment
- more elaborate transactions such as International Money transfer
- and now financial services such as loans and savings
We are processing one billion euros worth of transactions every week.
Having a mobile money account is a clear first step into the formal financial system. This is why at Orange we decided to expand our bank services to Africa beyond mobile money. Orange Bank Africa takes the success of mobile money further by offering loans and savings services geared towards non-employee customers, with seasonal and low income, or those that live in rural or remote areas as well as SMEs. Our bank offers simple loans that most importantly are within everyone’s reach and meet a wide range of needs.
People have the ability to save money, manage financial risk or take out suitable loans so they are then able to benefit from everything that genuine financial inclusion has to offer.
Two billion individuals and 200 million small businesses in emerging economies today lack access to formal savings and credit, according to a McKinsey study.
Q: Why was Cote d'Ivoire chosen as the first market?
A: We decided to launch first in Cote d’Ivoire, a country where we already have a strong mobile money base and trusted brand.
In Côte d’Ivoire, there are around eight million adults who are unbanked, and many of them are already in vulnerable positions. However, there are also over 5.2 million adults in the country who are unbanked but own a mobile device. Until we provide instant access to mobile financial services, designed specifically to suit these disadvantaged populations, attempts to increase financial inclusion will simply remain stalled.
The countries in the WAEMU zone have the two-fold characteristic of being countries where our mobile money activities are particularly developed, and have uniform banking regulations under the aegis of the BCEAO. It is thus in this area that we sought our first approval in Côte d’Ivoire.
Q: What services does the bank offer?
A: Orange Bank Africa is digital bank and the focus is on our offer of pico loans and savings, starting from 5,000 FCFA distributed via Orange Money. Our next priority will be to expand the range of services offered. To ask for a loan, right from the first subscription, all steps can be done via a smartphone or USSD. Everything is automated and it only takes a few seconds to open an Orange Bank Africa account.
In keeping with the Orange Money value proposition, our idea is to bring financial services to the widest possible audience.
We have data from Orange Money that allows us to check that customers are eligible, for example, that they have enough regular income so that their level of risk is acceptable for the bank.
Q: Who are your local partners?
A: In Africa, our partner is NSIA and it is a leader of bank assurance in Africa. For the past 25 years, NSIA Group has been developing bank and insurance solutions to address the needs of African people and make them available to as many people as possible.
Q: Who are the bank's typical customers? (age, income, gender and so on)
A: Our products are designed to serve the needs of the underserved who need access to financing or savings solutions with a tool that they trust, that is easy for them to use, and that presents no barrier to access, whether they live in a city or in a rural zone. Therefore we have the same interest for the customer whether he or she is self-employed or an entrepreneur who needs to purchase stock, a civil servant who needs bridge financing from one month to the other, a parent who needs to meet a deadline for school fees for his or her child while waiting for his paycheck, a farmer who needs to buy fertilizer, or simply any one that has to pay for medical attention or to purchase medicine, etc.
Customers do however have to be a minimum age of 18 years or above.
Looking deeper into our 500 000+ customers to date, our typical customers are predominantly male and single, are involved in retail activities (commercial or service), and are aged between 25 and 55 years old.
Q: When and where will you roll out the bank in other Francophone territories in Sub-Saharan Africa?
A: Our expansion plan is subject to the Central Bank ‘s authorization, therefore we are working towards being ready for implementation as soon as we receive the necessary approvals.
Q: Standard Bank has also rolled out a digital offering. How do you see this competition?
A: Our goal and objective has been to make a difference in people’s lives by helping them to get access to financial services that they otherwise would not have been able to get to so in our view, seeing more players enter the market reinforces the importance of digitalisation, and ultimately will help more branches of society to be included in this key part of economic activity.
Today, we are the only operator to enable customers to borrow money straight from their phone which no other competitor in our zone does at this stage. At Orange, we remain focused on developing new and innovative solutions that will continue to provide our customers with simple, effective and secure financial solutions that is needed in Africa.
This week sees the publication of Building a Data Ecosystem for Food Security and Sustainability AgTech V3.0 by Russell Southwood and Kelly Wong for CIAT, Bioversity International and International Food Policy Research Institute. To download a copy: https://cgspace.cgiar.org/bitstream/handle/10568/111666/Building%20a%20Data%20Ecosystem_XH.pdf?sequence=1&isAllowed=y
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