It’s been a secret which was never really a secret, but Orange has finally taken the plunge, meandering into the world of mobile finance at an event attended by Telecoms.com. Following a successful venture into the world of banking in Poland, the Orange team has finally taken the bold step in its domestic market. Orange Bank will officially be available to employees from the beginning of May, and open to everyone else from July. In an industry which is driven by the holy grail of diversification, Orange are starting to put some space between itself and the rest of the peloton, according Telecoms.com. “Innovating means choosing; choosing when to disrupt,” said CEO Stephane Richard, at Show Hello, the company’s annual innovation showcase. “We must ask ourselves two questions. Firstly, will this innovation be useful to the person; this question is about purpose. The second question is about whether people can actually use it. This is about access. This approach to innovation is called Human Insight.”
The step into the world of finance has been one which we’ve been anticipating for a while. April 2016 was the first hint of the move, with the purchase of a 65% stake in financial services firm Groupama, though a guinea pig launch in Poland was another strong indication. As of next month, French citizens will be able to access a whole array of banking services including current and saving accounts, as well as short and long-term lending products.
On the surface, it is an interesting move and some might say the next logical step from mobile payments, which are now starting to enter the mainstream. However, there is a significant difference between facilitating payments through a device and a user handing over responsibility of their hard earned cash. There is a reason the status quo of the banking sector hasn’t changed greatly over the generations; banking takes trust. People might complain about their banks, but they trust them entirely.
The same argument might be said about the telcos. After all, you already trust your telco with your credit card details, so in theory it is only one step further along the chain. In reality, this step is massive; only time will tell.
There is a possibility it will work though. The team are targeting younger demographics; one could imagine the digitally native millennials would certainly be more open to disruptive ideas that the stodgy older generations (example; the youthful and exuberant Deputy Editor Jamie Davies vs. elderly and creaking Editor Scott Bicheno) (steady on! – Ed). There is also a twist of the marketing of the product which could also play a role in the increasingly digitally defined economy.
Most banks have moved online, though the operations are still similar to that a traditional banking set up. Customer services is limited to Monday to Friday 9-5, with payments sometimes taking days to clear if made on the weekend. Orange has decided to put a digital twist on the proposition. After all, they are digital experts thinking how to create a banking solution, not banking experts trying to think about a digital solution.
For Richard, the latter doesn’t work, with the traditional banking sector is still waiting to undergo its own digital transformation journey. The bank is designed for the mobile world, not simply optimized for it. It’s a useful message, though only time will tell whether there is any traction is creating the wealth of credibility for the venture to be a long-term success.
To answer the challenge of the connected economy, Orange will ensure all transactions are instantaneous, irrelevant of when they happen according to the team, while also introducing an artificial intelligence powered chatbot, to ensure enquiries can be answered at any time of the day. The chatbot, which will be powered by IBM’s Watson, will be able to answer any questions, but also use Watson’s sentiment analysis APIs to more appropriately read the situation and detect emotion. In some case, the call may well be passed over to a human advisor.
This isn’t the only clever bit of AI we saw. The chatbot can also act as a bit of a financial advisor. Using machine learning APIs, the chatbot learns more about you the more you use it. It can forecast future spend and payments depending on previous experience, and also suggest if you need to set some money aside, assuming you have told it about a holiday or a big expenditure coming up. It’s a clever little idea, which is also a genuine differentiator.
The success of the bank will partly depend on how younger generations will react to the proposition. For the most part, older demographics are more cautious, loyal and sceptical; it might be a tougher area to crack. That said, Orange is doing something which few other telcos can boast about; diversifying with courage. It’s a bold and adventurous move you might expect from the enterprising OTTs rather than the boresome telcos.
With the threat of utilization bearing down heavily on the telcos, perhaps Ricard’s closing statement best describes the daring approach to diversification.