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Orange faces competition as its bank opens for business in France

Enrique Velasco-Castillo, Senior Analyst at Analysys Mason, warns that Orange will be faced with fierce competition from incumbent banks. 

Orange launched its much anticipated Orange Bank in France, earlier this month but the hard work is just beginning for the french telco.

"Incumbent retail banks have reacted to Orange Bank by launching competing services and ramping up acquisitions," Velasco-Castillo is quoted in Total Telcom.

In the short-term, competition in France will be Orange's biggest concern.

BNP Paribas, which tapped into the digital bank market with Hello Bank! Since 2013, bought low-cost, branchless banking company Compte-Nickel in April, "likely as a response to Orange Bank's launch in France," he explains.

"Orange has announced that Spain is the next country where it will launch Orange Bank, and so Telefonica may want to make pre-emptive moves to secure its position in the market," 

"Digital banking provides an attractive option for operators that have the appetite to compete against incumbent and new challenger banks... But it's risky." confirms Velasco-Castillo.

To read the full article on Total Telecom click here.