The document discusses recent trends in banking, specifically the concept of shared bank agencies in the US and upcoming changes in Belgium regarding cash deposit and withdrawal services. It also covers the struggling neobank Orange Bank, detailing its financial losses and strategic movements, such as acquisitions and potential partnerships. Additionally, the document outlines the legal distinctions between different types of financial institutions as defined by the French finance regulator, and provides insights into the strategic focus areas of the consulting firm Initio.

1. DIGITAL INNOVATION DIGEST
#24 – April 2021

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01
02
SHARED BANK AGENCY
Digital & Innovation Digest #24
3
7
THIS IS NOT A NEOBANK
03 10
INITIO &
THE SQUARE GROUP
04 12
ORANGE BANK:
THE BEGINNING OF THE END ?

3. 01
SHARED BANK AGENCY

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▪ After the carsharing, the coworking and the crowdfunding is the
Shared Bank Agency the latest trophy of the Share Economy ?
▪ In California (USA), the Credit Union of Southern California,
the Pacific Transportation Federal Credit Union and Printing
Industries Credit Union have opened a joint-office were
customer from each banks may comes to perform daily banking
operations such loans or insurance subscription, cash withdrawal
etc.
▪ All customers are served by “co branded” bankers able to operate
in the name of the 3 banners. Only the new customer onboarding
require the intervention of dedicated (proprietary) banker.
▪ This North American initiative is not unique; In 2019, in UK
Barclays, Lloyds and RBS launched a common “Business
Banked Hub” dedicated to pre-selected business customers and
more specifically designed to propose Cash management services.
▪ If the creation of cobranded bank branches to serve customers is
relatively uncommon, it is in current use to (neo)banks to develop
partnership with third party in order to propose banking services
where no agencies are available (or maintained). 2 example
among many others: Customers from Monzo and Starling Bank
can make cash deposit or withdrawal on their own account in Post
Office branches, while N26 customers can use Barzahlen network
in Deutschland for similar purposes.
SHARED BANK AGENCY
EXECUTIVE SUMMARY
How it may works ?
• All 3 Stakeholders banks are small & local-only independent
networks with niche-customer base. They are not in direct
competition for customer acquisition.
• As local business, those companies can’t afford to loose
customer contact and can’t rely solely on online services.
• Shared bankers working in the common office must be able
to serve all customers with equal level of efficiency and
must be able to propose homogenic but specific customer
experience depending on the brand they represent.
• From technical point of view, we don’t know if bankers are
using some unified platform to access each proprietary
backend systems or if they work on 3 distinct systems.

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▪ In Belgium, there is currently no similar concept of shared bank
agency is tested, but in 2021 two major evolutions in the way how
banks are managing cash deposit & withdrawal will be
implemented :
▪ The “Big4” banks (KBC, Belfius, ING and BNP-Fortis) will
progressively dismantle their own network of in-agency ATM to
replace them by a new white-labeled network managed by
Batopin a joint venture owned by the 4 banks. Those new ATM
will be located in Shopping Mall, Main Streets or Railway stations
but not more in branches.
▪ Smaller banks like Argenta, Axa, Crelan and Bpost Bank will
operate the same move with their new network named Jofico.
▪ The global cost of cash is 129 euros per year per inhabitant,
reminds Febelfin, whether for the production of money and
banknotes, their distribution or the taxes on distributors.
▪ In Belgium, the cost of ownership for a payment account is very
competitive and among the lowest of Europe. This increase the
pressure on cost reduction for banks.
SHARED BANK AGENCY
IN BELGIUM TOO ?
How it may works ?
• Jofico and Batopin networks will be independents from each
others and will be probably NOT inter-operable.
• Even within one network, it is to be feared that fees will
systematically apply in case of withdrawal. (like today when
customer withdraw cash from an ATM operated by another
bank).
Prototype of No-Name ATM as operated
by Batopin

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SHARED BANK AGENCY
NO AGENCY ? NO PROBLEM !
Classical
Bank
NeoBank
Proprietary
Branches
Network
Shared
offices Third Party
facilities
Proprietary
ATM network
Shared
ATM network
Grocery +
etc.
Limited range of services
Full range of services Completeness of services
Roving
Fixed
Pop Up
…

7. 02
ORANGE BANK: THE BEGINNING OF THE END ?

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▪ 4 years after the official launch in France, the Neobank “Orange
Bank” continues to accumulate losses and delays on its objectives.
▪ In 2020, the subsidiary of the operator Orange and the bank
Groupama still lost 195 million euros, a total of more than 640
million in debt accumulated since 2017.
▪ Orange Bank has already been recapitalized 3 times since its
creation, always by the Orange group only. Its partner Groupama
preferred to abstain and see its share of the capital fall from 65 to
22%.
▪ The French neobank had a target of 2 millions clients by 2020 for
France only, but today barely 1,5 millions customers have been
enlisted, including 300k customers from Spain and Ivory Coast
but also more than 500k customer who only subscribed to mobile
phone insurance.
▪ In January ’21, Orange Bank acquired Anytime, another French
neobank but focused on SME market. If the benefits for Anytime
are obvious, it is more tricky to identify short term return on
investment for Orange.
Orange Bank: The beginning of the end ?
EXECUTIVE SUMMARY
Orange Bank in Belgium ?
• Orange Bank is available in France, Spain and in some east
African countries (mainly Ivory Coast). According to various
sources, Orange Bank should not be launched in Belgium
before 2022 at the best.
• In 2021 Proximus, the main competitor of Orange on
Belgian market has announced a strategic partnership with
Belfius bank in order to launch “Banx” a neobank by end
the year.
• In April 2021, Orange started a tender offer on his Belgian
subsidiary in order to acquire 100% of shares. We do not
know if this is a first step to prepare the introduction of the
neobank in our country.

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▪ Faced with losses and growth problems, Groupama wants to sell
its stake in Orange Bank (22%).
▪ (Orange Telecom could also take advantage of this opportunity to
sell part of its shares, even if the operator continues to assert that
it does not wish to dispose of its neobank.)
▪ Several banks such as Société Générale, Crédit Agricole and
Santander have already expressed their interest but BNP Paribas
seems to be the best candidate to replace Groupama. Already
owner of Nickel neobank, the French bank leader has also made
an offer on Floa Bank (former Banque Casino).
▪ The absorption by a large banking group often seems inevitable to
ensure the survival of a neobank, following the example of Shine
buy by Société Générale, Fidor by BPCE… Orange could be the
next example.
Orange Bank: The beginning of the end ?
WHO TO REPLACE GROUPAMA ?
Orange Bank compared to others Neobanks
• The per customer acquisition cost of Orange Bank is
between 400 € and 500€. Which is aligned with neobank’s
standards.
• The operator's CEO estimates that Orange Bank's
profitability should be reached in 2024, "one year later than
planned“. 8 years after his launch and despite 7 millions of
customers, N26 is not profitable neither.
• According to a study done by the ACPR, the median
profitability of Neobank is around -20€ per customer and
could even dive up to -70€. Orange Bank's losses in 2021,
however, are well above this average.
• Orange Bank collects between 15,000 and 20,000 new
customers per months. To be compared with approx.
30,000 cust/month for Nickel (2017-2020), or 50k/month
for Boursorama.

10. 03
THIS IS NOT A NEOBANK
Neobanque

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▪ In April 2021, the ACPR (the French Finance Regulator) as
released a note were he remind that the neologism “Neobank” is
build upon the legal definition of “Banque”.
▪ According to ACPR’s definition, the label ”Banque” must be strictly
reserved for financial institution agreed as “établissement de
credit” (Credit Institution).
▪ As consequence: Payment Service Providers (PSP) or Electronic
Money Provider are NOT allowed to use the word “Bank” in their
brand or communication.
▪ As reminder, the ACPR (and the EU regulation) considers 3
different types of institutions legally allowed to provide financial
activities:
- Credit Institution: The “highest” level. (like KBC, BNP, SocGen…)
- Electronic Money Institution (like
- Payment Institution (Alpha Card, Worldline, Cofidis…)
This is not a Neobank
EXECUTIVE SUMMARY
Payment Services:
These services include account management;
▪ the ability to deposit or withdraw to deposit or withdraw
cash or to execute payment,
▪ payment transactions by card, transfer or direct debit or
direct debit;
▪ the possibility of issuing or acquiring payment instruments
and orders or the transmission of funds
▪ And since PSD2: Payment Service Initiation (PISP) and
account information (AISP)
E-Money Services:
In addition to Payment Services, E-Money services allow to
store monetary values under electronic form.
The E-Money provider issues, manages and makes available
the e-money.
Credit Services:
With this license, the financial institution is allowed to collect
funds and to grant credits. (in addition to all others services
allowed by the payment & e-Money license).

12. 04
INITIO &
THE SQUARE GROUP

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• 700 consultants, 95% employees
• 52 % men / 48% women
• Turnover 2019: 120m €
• 2.5% of turnover invested in training
• 1% of turnover invested in R&D
• Large team in Finance, Risk, Regulatory & Compliance
• Business/Process analysts & Project managers with Digital
experience
KEY INFORMATION
Initio in a nutshell
Initio is the international brand of the Square group, a business consulting firm in strategy, organizational and
operational consulting.

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Initio in a nutshell
Initio is organized in 4 business practices and 8 areas of excellence

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Areas of excellence
Businesses need to think ahead, to make decisions that will take them to the top.
Initio guides its clients by making its expertise available to them in 9 key areas.
.
INNOVATION
Square supports its clients in the transformation
of their innovation dynamics. Our consultants,
with their tailor-made approach, help to design,
industrialize and govern innovation to ensure the
sustainable growth of companies and their
transformation into socially and environmentally
responsible entities.
PEOPLE & CHANGE
Square helps its clients to acquire, integrate and
develop their organisation’s human capital. In
order to create greater commitment within teams,
our interventions focus primarily on adapting work
methods to operational and cultural changes, the
effectiveness of human resources departments
and skills development.
MARKETING
Square supports its clients across the entire
marketing spectrum: strategic marketing,
relationship marketing, product marketing,
communication, pricing, customer satisfaction.
Our expertise, initially focused on the banking and
insurance sectors, is now aimed at all B2C
industries or services.
SUPPLY-CHAIN
Square ensures the operational excellence of
logistics, from procurement to the last mile, with
differentiating customer journeys. Our experts
design omnichannel solutions that implement best
practices in information systems, mechanization
and robotization.
DATA
Square develops Data strategies and ensures their
operational implementation by taking the lead in
Data Management, Data Analysis and Data
Science projects. Our expert and pragmatic
approach aims to enhance and secure companies’
data assets.
REGULATORY & COMPLIANCE
Square advises its clients in the rollout of new
regulations, as well as in the optimization and
enhancement of control systems. This area of
excellence is supported by a community of
experts of 130 consultants who, in addition to
client assignments, conduct major research and
publication work.
RISK & FINANCE
Square leads the management of financial and
non-financial risk control programs, as well as the
transformation of the Risk and Finance functions
in response to changes in prudential regulations
and issues related to data control.
DIGITAL
Square assists its clients in the development of
their digital strategy, the design and
implementation of new digital journeys for their
clients or their employees, as well as in all internal
transformation projects and support for new
design methods.
CSR & SUSTAINABLE FINANCE
Initio supports its clients in their transformation
towards a more responsible model. This support
covers the strategic definition of the CSR
ambition, the transformation of business models,
and compliance work both in terms of their
regulatory aspects and their Data Management
and Data Science aspects. Initio also assists its
clients in their human and cultural support for
their CSR policy.

16. Initio
@initio_eu
17, Boulevard General Wahis
1030 Schaarbeek
Belgium
+32 (0)2 669 77 44
Initio.eu
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