LCL takes its turn in instant loans

Between the success of BNPL and fintechs offering instant loans, traditional banks have seen their lending business seriously undermined. After a wait-and-see phase, most of them are reacting by proposing digital and easy-to-access offers to meet this new standard. LCL is now launching its Flex offer of instant loans, which is 100% digital.

FACTS

• This solution, called Flex, will allow its customers to borrow between 200 and 2,000 euros directly from the bank's mobile application, without having to go through an advisor in a branch or provide any supporting documents.

• Customer journey:

  • The customers concerned by this offer are informed by a notification on their mobile app.

  • They can then simulate and subscribe to the Flex offer in a few clicks

  • The signature is electronic and is done directly in the LCL Mes Comptes banking app

  • The loan amount is paid immediately

• The borrowing rate is 0%. The customer makes three monthly repayments according to a precise schedule communicated on subscription.

• Fixed fees that vary from €2 to €20 depending on the amount borrowed. In the event of late repayment, the overdraft rate applies.

• In accordance with the regulations, customers have a 14-day withdrawal period, even if the contract is executed immediately.

CHALLENGES

• Attracting young people: The instantaneousness and simplicity of subscription are two of the reasons why BNPL has been so successful with this population. Two advantages that have been reproduced in this new LCL offer.

• Repositioning against the competition: In recent years, several start-ups such as Finfrog, Bling and Cashper have entered this niche. But the banks are also getting involved: by buying Floa, BNP Paribas wanted to strengthen its position in this type of product.

MARKET PERSPECTIVE

• Last year, UFC-Que choisir attacked several of these players to denounce the vagueness surrounding the conditions of these loans as well as effective rates that sometimes exceed the usury rate. Indeed, to obtain their loans instantly from Cashper or Floa, consumers have to pay very high fixed costs in relation to the amounts borrowed.

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