Despite the strong increase in the number of customers, online banking continues to seek profitability

Online banks are becoming more and more important in the market. This is one of the main lessons of a survey carried out by the Prudential Control and Resolution Authority (ACPR). As part of this, last year the financial police questioned fifteen players and financial intermediaries that offer banking or payment services online or accessible through 100% mobile applications.

These players saw their number of clients increase from 8 million in 2018 to 16 million in 2020 Boursorama, BforBank, Hello Bank, ING Direct and Fortunéo who are attached to large traditional banking groups or even N26 and Lydia. Young people under 30 weigh heavily in this uptrend, unlike executives, whose representative share is falling.

An optimal pandemic context

Although the banking market is still mainly captured by traditional institutions that enjoy customer loyalty, the model offered by online banks is becoming more and more attractive. The study mentions, in particular, the pandemic as a context that confirmed the new emerging uses of customers:

Online banks have also benefited from the dynamism of online commerce and the rise of contactless payment, especially for very small transactions.

growing losses

However, this significant increase in the number of clients has not yet translated into profitability for these digital financial players. According to the study of the entity that depends on the Banque de France, its net losses reached 441 million euros in 2020 compared to 376 million the previous year. The evolution of the net profit per client is similar since the average level drops 12 euros to stand at -57 euros.

Only one in three players surveyed plan to be profitable by 2022-2023, particularly those who are not part of a banking group. Among those linked to a large traditional bank, two have already reached this threshold.

According to the ACPR, this earlier profitability is due to better control of acquisition and general expenses, but also to a greater specialization in specific segments, compared to the so-called “generalist” players.