With only 1 in 5 French people visiting their bank once a month, the banking sector is forced to evolve and change its habits. The dematerialization of services and the advent of digital technology are contributing to this change. What will the bank of tomorrow look like and what will be the impact on the consumer?
The Gradual Dematerialization of Banking Services
According to the Audirep study for BforBank of May 2015 (see the infographic below), today 1 in 10 French customers say they have an online bank and 42% of these individuals who identify it as their main bank, the future of the bank seems clear. The dematerialization of banking services has indeed been the rule for a few years, with fewer and fewer counters and physical presence of traditional banks. The rate of disappearance of bank branches is currently 2 to 4% per year, and there is no doubt that they could eventually become a thing of the past. The figures also show that 44% of French people say they would not recommend their current bank to their loved ones, which proves to what extent the future of the banking sector is increasingly tending towards the dematerialization of banking services and products.
Online Banking Praised for Its Savings
Like many sectors of finance but also of traditional businesses, desertification is affecting the banking sector. The gradual disappearance of counters and establishments in rural areas is a huge problem for consumers. Online banks are then seriously competing with traditional banks and even replacing them in part. A logical development when you know that opening a bank account online offers many advantages for customers: significant savings (households pay about 20% less on their annual fees), simplification of all administrative procedures but above all free of charge many services and self-service access all year round…
The Advent of New Payment Technologies Is Disrupting the Banking System
The banker of the future will also have to adapt to the changing habits of households in terms of payment. While the bank card remains the most used means of payment today, it is now necessary to reckon with new players in the new digital and information technologies.
1. Applications, Online Platforms and New Currencies
Tablet computers and smartphones are now massively used by consumers, even to pay for their purchases with applications such as Lydia or Paybyphone for example. Contactless payment, fingerprint, voice and soon facial recognition, a smartphone can now easily serve as a terminal and payment relay. In addition, Internet users are increasingly using online payment platforms such as Paypal. Finally, new currencies such as Bitcoin are appearing and building new payment networks that can be used directly by consumers.
2. The Web Giants Are Getting Involved
All the Web 2.0 multinationals are also mobilizing to encourage this trend, and the Internet giants are bringing their share of innovation in terms of payment methods. With their Apple Pay and Google Wallet systems, Apple and Google are following this trend, aiming to simplify and secure online and in-store payments.
Undeniably, the digital revolution is underway and is benefiting households who now have access to new means of payment that are easily accessible and fully secure. This is additional competition for traditional banking players, who have every interest in reinventing themselves to meet the demand of an increasingly demanding customer who is inclined to use new technologies.
Additional Information
- The French banking sector is highly concentrated, with four major players: BNP Paribas, Crédit Agricole, Société Générale and BPCE.
- The online banking market is growing rapidly in France, with the number of online banking customers expected to reach 20 million by 2020.
- The main challenges facing the banking sector in France are the dematerialization of services, the advent of new technologies and the need to adapt to the changing habits of consumers.
