Long dominated by BNP Paribas, Société Générale, Crédit Agricole and others, the banking market is now open under our eyes. In fact, it is already open there are now a dozen years with the launch of online banks… but they are all – without exception – subsidiaries of traditional banks*. Today, we are witnessing something entirely different : the emergence of mobile banks, called ” neo-banks, or Fintech (we’ll come back to). Inspired by an article in the site maddyness.com entitled ” Banks in lines and neo-banking : what are the differences “, we suggest you think about our tour on this between these two types of players in history to see more clearly.
Online banks and mobile banks : not the same legal nature
First major difference : the legal nature of the online banks and mobile banks. Online banks are – such as traditional banks of which they are subsidiaries of credit institutions. The credit institutions may receive and retain funds from the public, to distribute credits, provide and manage means of payment (grant operations found in particular) etc…
On the other hand, the mobile banks or new banks are payment institutions. This status allows them to perform banking transactions (by card, bank transfer, deduction, or from a mobile application), and distribute credits in a highly supervised. That is all.
The bank mobile German N26 is often referred to as neo-bank, but it is, indeed, a bank that obtained a banking license in Germany, allowing it to practise as such in all EU countries.
Mobile banks and online banks would not have the same media users
Thoughts to meet the new habits of banking consumers, the mobile banks are built around smartphone apps. They can be used, therefore, first of all, as their name implies – mobile.
To carry out their banking operations, the users of the online banks are turning in the other hand – and this is quite logical – to the computer.
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The Fintechs : the threat to the banks ?
Not the same constraints account opening
As said at the moment, the future customers of online banks open their account on the computer. In addition, they must present a strong list of credentials, including ” to prove their income requirements “. And, to finalize opening the account, they must make a minimum payment on their account.
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Opening of account : the conditions of eligibility of the online banks are evolving
On the side of mobile banks, account opening is done on the mobile without conditions of income, supporting documents to be provided are limited to the presentation of an identity document and no minimum deposit is required.
Not the same offers of banking products
The offer of banking products in the online banks are generally similar – note maddyness.com – the traditional banks. However, these offers are usually limited. Except for Boursorama Bank which is – for the moment – the only online bank to offer a current account, business account, savings books (regulated and an account passbook), life insurance, stock market investments, credit immobilier, credit conso, and the revolving credit facility.
The offer of mobile banks is for the moment limited to the current account. Their legal nature do not, in particular, as we have seen – to distribute real estate lending, for example.
Not the same processing time
It is not only the opening of the account, which takes a few minutes at the mobile banks. All banking transactions are processed in the moment. The immediacy of transactions being the rule.
Not the same story in the online banks that have deadlines “often close to traditional banks” – highlights maddyness.com.
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What are the deadlines for opening a bank account in a branch or online ?
Not the same services
Online banks are becoming emancipated services of traditional banks by offering or advisor dedicated bank, or agencies the physical. Therefore, it is not possible to perform operations in the agency. Note 2 exceptions : Hello bank and Monabanq that have not completely cut the cord with their parent companies and, in particular, enable their customers to deposit cheques in branches, BNP Paribas and CIC.
For mobile banks, “what you see is what you get**” as they say the anglo-saxons. No dedicated advisor, not local. A customer support which – in the best case – is not too cluttered with requests and may respond in a “reasonable” time to your questions. So, in the event of a problem, it can feel lacking…unless you have the reflex to turn to the social networks. Revolut prevents the 06 of July on Twitter of a bug concerning the payment by CB :
Our payment processor is experiencing technical issues, which may cause card payments to fail. We’ll provide an update as soon as possible!
— Revolut (@RevolutApp) July 6, 2017
Online banks and mobile banks : not the same price
Online banks are cheaper than their parent companies. They offer more often bank cards top of the range free of charge. Finally, the gratuity is subject to monthly income minimum… But, some – Monabanq, Boursorama Bank and its Welcome offer, ING Direct – that offer alternatives to paid to these conditions of income. A CB Visa Premier € 5 per month for Monabanq, or a Gold MasterCard at € 5 per month at ING Direct for example.
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ING Direct : when the online bank gets paid…
Get a CB with top of the range in the mobile banks, not the order of the day… You will be dealing in most cases with a classic CB, or even a map to a permission. For the moment, only N26 offers a card very high-end – N26 Black and its Premium account – for eur 5.90 per month.
*ING Direct is a subsidiary of ING, Boursorama Bank, Société Générale, Fortuneo of Crédit Mutuel Arkéa, BforBank of the Credit Agricole bank, Hello bank BNP Paribas, and Monabanq by Crédit Mutuel CIC.
**Literally ” What you see is what you get “, basically ” No surprise “.