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German digital challenger bank Fidor has been acquired by French banking group BPCE, which is accelerating its digital transformation.
Fidor, which was launched in Germany in 2009 and gained a banking licence in the UK in 2015, has also set up operations in the US and Dubai.
CEO Matthias Kröner and his colleagues applied to the German Federal Financial Supervisory Authority, BaFin, for a banking licence back in 2007. Fidor uses social media to overcome the cost and complexity of traditional banking, and increases customer trust through an online community.
It developed its own open-technology platform, which users can plug into via application programming interfaces (APIs). Kröner will remain as CEO.
BPCE has 35 million customers,108,000 employees and 8,000 branches in France.
Its chairman, François Pérol, said: “This is a key step in the acceleration of the digital transformation of our group. It further demonstrates our commitment to innovation, to developing a customer-centric approach enabled by digital banking technology, and to be more involved in the digital and mobile banking field.”
Kröner, a fintech proponent, said the deal does not mean Fidor will disappear. “It will allow Fidor to continue its international expansion and drive the development of innovative digital technology even further,” he added. “In a world of increasing volatility, it is important to be member of a strong group and this transaction is strongly improving our overall financial sustainability.
“Fidor’s senior team, including myself, will be able to focus on expanding our core business offering and explore more market opportunities all over the world.”
Read more about financial services challengers
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- Here are six IT companies that are shaking up retail banking.
- Atom Bank has been granted a banking licence by the Bank of England and is set to launch later in 2015.
- The UK could be on the cusp of dramatic changes in retail banking following the launch of a current account comparison service.
Fidor is one of a growing number of challenger banks that are disrupting the financial services industry by using the latest digital technologies to engage with customers in ways they prefer.
Traditional banks are reacting by investing in fintech and they face a choice between developing their own digital systems, buying them from suppliers or acquiring new digital banks, such as Fidor.
According to a study by EY, high-income young people are the biggest group of early adopters of fintechs products and services.
The study, of more than 10,000 digitally active consumers in Australia, Canada, Hong Kong, Singapore, the UK and the US, found that about 3,000 had used fintech. Among those fintech users, just over 25% of 25 to 34-year-olds used two or more fintech services – a figure that is expected to reach nearly 50% in the foreseeable future.
A further 21% of users of two or more fintech services were in the 34 to 44 age group, 17% were aged 18 to 24, 12% were aged 45 to 54, 7% were aged 55 to 63, and 5% were over 65.