La Story (Les Echos) Analysis: How Online Banks Are Changing the French Banking Map—Boursobank, Revolut, and Trade Republic

▶ Original Episode: https://shows.acast.com/la-story/episodes/comment-les-banques-en-ligne-bousculent-le-paysage-bancaire

July 31, 2026

Overview

In this episode of La Story, the daily podcast from the French business newspaper Les Echos, the focus is on how online banks and neobanks (digital-only banks that emerged around 2015) are shaking up the French banking industry. Host Clara Grousis discusses the topic with Les Echos finance reporters Gabriel Nedelec and Christelle Tagedian.

The momentum of these emerging players is remarkable, as seen in German fintech company Trade Republic's advertising campaign featuring actor Brad Pitt during World Cup broadcasts. Leading the pack are Revolut and Boursobank (formerly Boursorama), with analysts at investment bank Jefferies estimating Boursobank's valuation at 14 billion euros (approximately 2.5868 trillion yen, calculated at 1 euro = 184.77 yen).

Meanwhile, traditional banking networks continue to lose customers. According to estimates by consulting firm McKinsey, while online banks and fintechs gained 15 million new customers in France between 2021 and 2025, traditional banking networks saw a net loss of over 2 million customers. The program delves into the background of this tectonic shift and the reality of the traditional banks' counterattacks.

Differences between online banks and neobanks

Nedelec begins by clarifying the differences between online banks and neobanks. Online banks refer to institutions that have no physical branches, no locations to deposit checks, and where everything is completed remotely. The ideal is to avoid the need for phone support as much as possible.

The difference from neobanks is essentially a matter of generation. Banks of the new generation that emerged around 2015, such as N26 and Revolut, are called neobanks, but in terms of functionality, online banks and neobanks are very similar. Both are built around the core of customer autonomy and maximizing self-service.

Customer support naturally exists, but in the words of the Boursobank team, if a customer has to pick up the phone, it is proof that something has gone wrong and that there is a point to be improved. Therefore, all banking transactions are completed via smartphone apps. These emerging players have set a new standard in terms of smoothness and simplicity, forcing all traditional banks to revamp their user experience.

Boursobank's strong performance and the rise of neobanks

Société Générale ($GLE) announced its financial results at the end of April and, for the first time, clearly highlighted the figures for its subsidiary, Boursobank. Nedelec points out that this is a major change from previous earnings announcements. Previously, Boursobank's performance was hidden deep within official documents, but this time it was clearly brought to the forefront. The reason is that the performance is strong.

Boursobank recorded a net profit of 92 million euros (approximately 17 billion yen, calculated at 1 euro = 184.77 yen) in the first quarter. This accounts for about one-sixth of Société Générale's total quarterly profit and is on track to meet the target of 300 million euros (approximately 55.4 billion yen) in profit for the full year. However, this was achieved by slowing down the pace of new customer acquisition, as Boursobank reduced some of the welcome bonuses that had attracted many customers. Even so, Boursobank, which claims to be the "cheapest bank," has 8.9 million customers.

2025 was a particularly fruitful year for these emerging banks. While Revolut and Boursobank are clearly leading the pack, traditional banking networks lost a net total of over 2 million customers in France. The rise of online banks is not a new phenomenon, but 2025 is said to have been a turning point for the French market. This is because the concept of a "main bank" began to come under attack, and the "fragmentation" of banking transactions across multiple financial institutions accelerated.

Why customers are attracted to new banks

Tagedian states that while price discussions play an essential role in why customers are attracted to emerging banks, that is not the only factor. Customers have become more mobile, always connected, and demanding of quick answers; they want more digital access and higher agility. They are also attracted to the technological tools of innovative customer experiences provided by neobanks. There is also an increasing number of customers who are more informed, more autonomous, and require less advice.

A particularly new phenomenon is that young people, who previously tended to choose their "parents' bank," are no longer doing so. Those under 35 are increasingly acting as recommenders of financial services to those around them, including their families, and are prioritizing digital-native operators. This is one of the disruptive trends pointed out in the latest annual survey on retail banking in France by consulting firm Bain and Company. Young people are taking on the role of advising their parents, effectively regaining the initiative in banking transactions, and there are increasing cases where parents choose neobanks when opening accounts for their children.

The threat of the disappearance of the "main bank" concept

Tagedian explains that what traditional banks fear most is the disappearance of the "main bank" concept. A main bank refers to the bank where a customer's cash flow is the largest and which provides the most products and services, such as checking accounts, bank cards, various loans, insurance, and asset management. This concept is being attacked head-on by emerging players.

Customers still want to have a partner bank that supports them, but customer relationships tend to be dispersed among multiple operators. Customers use multiple financial intermediaries, choosing the best operator for each need, such as daily banking transactions, savings, loans, and sometimes trading or crypto assets. The emergence of 100% online operators specializing in savings and investments, like Trade Republic, is part of this trend.

Revolut has clearly set a goal to become its customers' main bank. The idea is to have them use it not just for overseas travel, but also for taking out loans, managing savings, and receiving their salaries. There is a dark scenario that some experts are wary of: customers keeping their salary deposits at a traditional bank to secure better terms for a mortgage, then moving the balance elsewhere once the salary arrives and monthly debits are settled. While this remains on a small scale for now, it is pointed out that it could expand in the future.

However, the battle for the main bank status is still far from won for neobanks. On average, the revenue per customer for online banks remains significantly lower than that of traditional banks, and they are at a stage where future growth is expected.

The lending sector that online banks have yet to conquer

A sector that online banks have yet to conquer is lending. Despite having the resources and attracting customer interest, the volume of loans is very low, notes Mr. Nedelec. The background to this is that it was not originally in their DNA. Boursobank started as an online bank specializing in investment, while Revolut began with payments, particularly overseas payments. Although their service offerings have expanded, they remain very cautious about mortgages.

To look at this objectively, one must examine the loan-to-deposit ratio. Currently, this ratio is about 30% for Boursobank and only 6% for Revolut, whereas traditional operators like Société Générale are around 80-90%, and cooperative-based operators like Crédit Mutuel and Crédit Agricole exceed 100%.

Mortgages are not very profitable for banks in themselves, and they are complex in terms of regulation; furthermore, the required capital burden could shake the financial health of emerging operators. On the other hand, they are also very powerful products for building long and deep customer relationships. Even if a mortgage is not profitable on its own, it becomes very attractive when combined with savings and insurance products over the long term, strongly locking in customers. In addition, there is the symbolic aspect that 'a bank is something that lends money,' which is precisely why Revolut is trying to strengthen this area.

Regulatory walls and sanctions against Revolut

When neobanks compete with traditional banks in lending, regulatory aspects can sometimes act as a brake. In April, the British bank Revolut was fined approximately 11 million euros (about 2 billion yen, calculated at 1 euro = 184.77 yen) by the Italian competition authority for unfair commercial practices.

According to Mr. Tagedian, Revolut is a unique entity. Its headquarters are in London, it operates within the EU under a Lithuanian banking license, and it now also holds a British banking license. Obtaining this British license required a months-long battle. The sanction in Italy was due to illegal, aggressive, and misleading commercial practices in some investment services. Revolut has indicated it will appeal, but it shows that there are still flaws to be corrected to become a true bank.

According to reports by the Financial Times, the ECB (European Central Bank) is said to have put the brakes on Revolut's expansion, taking measures to block the launch of new products in the eurozone based on flaws in risk management and compliance. This was a few months ago, and while it is believed that the fintech side has since taken a series of corrective measures, it is said that they are still halfway there.

The counterattack of traditional banks

Traditional banking networks are, so to speak, with their backs to the wall, searching for the best ways to counter neobanks. There is an awareness of the need to accelerate digitalization, and while it may feel a bit late, consultant Christophe Bagnol points out that one should remember that network-based banks still hold over 90% of industry revenue.

As a concrete move, Crédit Agricole ($ACA) launched a 100% online mortgage at the end of last year. Crédit Mutuel has begun to gradually deploy a hybrid-type funnel through its subsidiary CIC, allowing customers to choose between traditional physical branches and a 100% online 'digital branch' with access to a dedicated advisor, at the same price as traditional management in branches.

Traditional banks are accelerating digitalization while simultaneously entering the realm of free offers, which was previously the exclusive domain of neobanks. Furthermore, they are looking at the world of 'Beyond Banking.' This involves locking in customers with ancillary services outside of banking, such as media subscriptions and streaming offers, which was Revolut's specialty, but similar offers are now beginning to sprout among traditional operators. In addition, just as neobanks and online banks without branch networks have approached influencers to shorten the distance to customers, traditional banks are adopting similar methods. Traditional banks have not been defeated at all yet, and they still hold the majority of customers in France.

The peculiarity of France's excessive branches

Boursobank has 9 million customers but only 1,000 employees, whereas its parent company, Société Générale, has about 25,000 employees for the same number of customers. The arrival of neobanks has brought a new, functioning model that makes customers more autonomous and reduces reliance on branch advisors.

Even so, French banks still have many more branches compared to neighboring countries. The number of branches per 100,000 inhabitants is 49 in France, 37.1 in Spain, 34.2 in Italy, and 23.4 in Germany. When Mr. Nedelec reported from the Netherlands, he found that the country's largest bank, ING, had only 30 branches left in the entire country. This is a figure hard for the French to believe.

Banks are culturally unique to each country, and while the French admit they rarely visit them in their daily lives, they are not at all mentally prepared for the banking network to disappear from their streets. Resistance movements arise in various places whenever the last branch is about to withdraw. This is aimed at protecting access to cash, which is decisive, especially for local commerce. Even so, people are clearly no longer visiting branches, and there is no longer a need to visit daily for everyday banking transactions, so the reorganization of the store network is said to be a historical trend.

Changing roles of bankers and the mutual influx of talent

Mr. Nedelec explains that the ongoing store reorganization does not necessarily lead to mechanical staff reductions. This is because advisors are being consolidated into larger branches or remote service centers, and even if customers stop coming to branches, they still need advice during important life stages, such as for mortgages. It is rare for someone to be able to complete a transaction that becomes a major life project solely through an online bank without the intervention of a third party at the bank.

As a result, the profile of bank employees is also changing. Routine tasks such as transfers, account inquiries, raising payment limits, and temporary overdrafts no longer require much human intervention. On the other hand, critical situations require sound advice, and advisors are expected to be competent and well-trained. This is also because customers themselves are becoming more informed through the internet and chats that are increasingly accurate in answering financial questions.

Looking at the backgrounds of neobank employees, it is clear that these institutions are becoming more institutionalized. Building a career at a neobank has become attractive to bankers, creating a trend where former employees are later hired by major banks. Conversely, there has been a movement of high-profile bankers moving to neobanks in France over the past few months. The most symbolic example is the move of Frédéric Oudéa, former top executive at Société Générale, to Revolut. Other examples include Béatrice Cossa-Dumurgier, who came from BNP Paribas to serve as CEO of Revolut for Western Europe, and the Director of Risk for Western Europe at Revolut, who moved directly from La Banque Postale.

The tailwind that AI brings to emerging players

Finally, both point out that emerging players are also shaking up the industry with AI. Because neobanks were born in a digital environment and are centered on innovation, they can more easily incorporate technological advances in AI and offer customized, made-to-order products to their customers. Above all, they are not tied down by the complex systems of traditional banks.

According to various studies, online banks and neobanks are a step ahead and currently occupy a more advantageous position in the responses provided by LLMs (Large Language Models). These AI tools leverage a strong recommendation effect in product contracting and account opening, so the rise of LLMs could potentially further amplify the momentum of emerging players.

▶ Previous article in the same series: La Story (Les Echos) Analysis: Port Modernization in the French Antilles—The Eubantie Hub Port Project and the Risk of Drug Smuggling https://note.com/yondo/n/n407692bc036d

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