#Digital transformation

How to meet the needs of French banking customers

Sep 07, 2022 - 8 min read
Also Available in : Français
Ludwig Hervé, Head of Content at Sopra Banking Software

The banking sector is constantly changing, driven by the arrival of fintech companies and the many solutions intended to improve the customer journey, and the user experience in general.

To better understand the new behaviors and needs of French banking customers, IN Banque and Sopra Banking Software conducted a study of a sample of 1,045 people aged 18 and over, representative of the French population. In this article, we take a look at some of the key findings.

Mobile banking apps: a necessity for 84% of French customers

Smartphones are now part of everyday life for all age groups. Their widespread use has played an important role in the development of applications of all kinds, including in the banking sector. In fact, 84% of respondents with smartphones say they have already downloaded their main bank’s app, an increase of 27 points over the past six years. A trend that continues to grow year on year.

This need is even more pronounced among young people. According to the study, 90% of people aged 35 and under say they have downloaded their bank’s app. A 10-point increase compared to the beginning of 2020.

Those between the ages of 35 to 49 are also seemingly proponents of digital banking, with 85% of them having already downloaded their main bank’s mobile app. That’s an 8-point increase over 2020.

As for seniors, we see a strong increase in bank app downloads: evidence that older customers have also been impacted by the digitization of services and have adapted well to new technologies. In fact, 87% of connected customers aged 65 and over now have a smartphone, and 60% say they have downloaded the app from their main bank. An increase of 16 points compared to the beginning of 2020.

And finally, here’s another interesting insight from the study: once a banking app is installed, only 3% of respondents say they do not use it, highlighting how powerful digital banking is from an engagement perspective.

Response and posting times: areas for improvement

Although generally satisfied with the services provided by banks within the context, some processes and operations can be optimized to better meet customers’ current expectations. This includes request response times and the posting of banking transactions.

40% of respondents, for instance, say that they feel dissatisfied with the response times for their consumer credit applications. More than one-third of respondents (35%) believe that it takes too long for external transfers to be processed. And 30% say that it takes too long for posted credit card transactions to appear in their checking account.

These figures echo an ever-increasing desire to have complete, instant visibility of transactions, in order to better manage budgets and expenditures.

Perceptions around speed and response time vary depending on the age of the customer, per our study. Overall, young people are far less patient and more sensitive to processing times than older customers. The culture of immediacy that has developed in recent years, due in part to social networks, generates a need for instantaneous results. More than one in two young customers find that consumer credit application response times are too long. For example, 45% of customers under the age of 35 are not satisfied with the time it takes to post external transfers, compared to 32% of those between the ages of 50 to 64, and only 20% of connected customers over the age of 65.

The same trend holds true for the posting of credit card transactions: 43% of young customers feel the current lag times are too long, compared to only 13% of those aged 65 years and older.

New security improvements appeal to customers

To meet their customers’ ever-increasing expectations, banks are being forced to make improvements to their online services. According to our study, the improvements customers consider most useful are largely security-related:

  • An authentication request on the mobile banking app when making a transfer to a new recipient (89%).
  • An authentication request on the mobile banking app when logging in for the first time after 130 days (85%).
  • An authentication request on the mobile banking app for a remote payment transaction totaling more than 30 euros (80%).

Next are features designed to reduce processing and response times, and others that allow for simplified and expanded access to financial products and new non-financial services:

  • Instant bank transfer, with immediate availability of funds (84%).
  • A response to online consumer credit applications in under one minute (74%).
  • An expanded offering of savings and investment products that can be applied for online, open to other banks or financial institutions (67%).
  • Access to new, non-financial services from the mobile banking app or online banking space (64%).

In addition to having an instant snapshot of their spending, French banking customers are also seeking new online services to better manage their budgets. And graphic spending analysis features have been shown to be very popular tools. 51% of respondents from our survey say they use these services from their bank’s mobile app or website. This is an even more popular trend among young people, with 24% saying they use these types of tools regularly.

Tips and alerts to better manage money, spend less and save better are also welcome, even though they are not used repeatedly. 47% of those interviewed have used these aids, but only 20% of young customers use them on a regular basis.

French banking customers would be more inclined to use customer community platforms, per our study. 45% of those in the sample would like to use this service to view feedback from other consumers before applying for certain products or services offered by their bank.

Another reason given referred to user experience sharing, which often provides a quick and easy solution to problems with online services. However, such a platform should be implemented under certain conditions to align with customer expectations. Platform moderating must be a priority, to ensure the success and use of the service and appropriate interactions between consumers. For a large majority of respondents, this means that the topics proposed are approved by banking industry experts, or by other, more qualified consumers who have earned this status.

Customers also expect specific content, such as:

  • Money-saving tips.
  • Tips for managing money, living expenses and credit.
  • Explanations of savings products, financial investments and credit offers.
  • Information for more responsible consumption and saving.
  • Assistance with using online services.
  • Information about offers by the bank and its partners.

Payment in installments and deferred payment, widespread new practices

The consumption patterns of French banking customers have changed greatly in recent years. Breakthroughs in e-commerce and the development of innovative banking services and products have given consumers new possibilities, such as payment in installments and deferred payment. According to our study, 53% of French customers have already paid for a high-cost, online purchase in multiple installments. However, this is a practice that has not yet become a habit, since only 14% say they do so on a regular basis.

41% of French customers claim to have already used deferred payment. Unsurprisingly, the customers who use payment facilities most frequently are the youngest demographics (18%) and those who have the most modest incomes (22%). A trend that has continued to grow stronger this year.

Strong interest in new digital payment services

After a slow start with poor adoption rates, contactless payment has gradually become increasingly popular, even changing the consumption habits of French banking customers. In 2021, 60% of French customers were already using contactless card payments. According to the study, 22% of smartphone owners now report using contactless with their mobile, a 4-point increase from 2021, and a 7-point increase since 2020. This shows a year-on-year increase, which corresponds with the rise of services such as Apple Pay, Google Pay and Paylib, which banks now recommend to their customers.

Although many of our respondents say they are ready to take the next step in payments (54% of respondents say they are already using or are ready to use digital payment services), a few barriers remain:

  • 39% of smartphone owners don’t know how to use said services
  • Lack of awareness of the services, coupled with privacy and security concerns
  • Contactless card payment is deemed sufficient enough.

However, French banking customers have a definite appetite for innovation in the field of digital payments. The study highlights strong demand for new solutions and mechanisms that bank customers are already using, or would be willing to use, such as:

  • A bank card with secure payment by fingerprint or facial recognition (54%).
  • A payment card that can be used in different currencies, in order to limit foreign exchange costs when traveling abroad (50%).
  • An online payment and money transfer service between individuals via a mobile app, SMS, etc (43%).
  • A mobile payment service that incorporates all payment cards, with the option to choose any of them for a purchase (40%).
  • A service to pay securely in cryptocurrency (25%).

Are you interested in the banking practices and needs of French customers? Learn more about innovative platforms and services by accessing the full IN Banque and Sopra Banking Software study, available by clicking on this link.

For more in-depth knowledge on payments in Europe, download the PayObserver 2022 barometer produced by Galitt, which deals with the following topics: payment players, mobile payment, e-commerce, customer journey, BNPL and cryptocurrencies.