REX: Half-Hearted Results for EKO by CA

FACTS

• A year after they launched their low cost m-banking offer, EKO, Crédit Agricole reports on the outcome of its activities.

• When officially introduced in December 2017, EKO aimed to attract 100,000 subscribers in a year.
• According to their Q4 2018 results, this goal hasn’t been met: they only claim 80,000 EKO accounts, even if all of the group’s regional banks sell this offer.

CUSTOMER PROFILES

• 70% new contacts for the group
• 37% new contacts via Internet
• 8% new accounts for CA
• 15,000 of EKO customers eventually opted for conventional current accounts at Crédit Agricole
• 50% of EKO customers signed up for an additional offer (savings or insurance) from Crédit Agricole

CHALLENGES

• Attracting new customers. EKO was meant to act as a prospecting driver for Crédit Agricole, which, from the start, was aware of a risk of cannibalisation inherent to launching a digital offer. A successful bet as 70% of their new customers onboarded through this connection channel.
• It also contributes to increasing the group’s revenue and improving synergies. Nearly half of their customers signed up for additional Crédit Agricole products.
• Stranding out as a challenger bank. Crédit Agricole viewed EKO as a tool to become a reference on the highly competitive market for challenger banks. As they only won 80,000 customers, this goal hasn’t yet been achieved. Yet, they aim to attract young customers with an easy to use and low cost basic offer.
• These disappointing results are not considered discouraging by the group: they still expect EKO to attract 500,000 customers in 5 years.

MARKET PERSPECTIVE

• Crédit Agricole launched EKO quite late compared to their rivals. This can be accounted for by the fact that they tried to avoid that it should overlap with their existing banking services. They were successful in achieving this objective as no cannibalisation effect was observed: most of EKO’s customers are among Crédit Agricole prospects.