Europe’s largest bank by
branches, Crédit Agricole, has finally unveiled its long-awaited
business strategy. Duygu Tavan attended the strategy presentation
in Italy and initially found that while the bank was strong on
targets it was weak on detail – but a trip to the bank’s innovation
centre in Paris revealed more insight.


Bar chart showing targets in Italy 2010-2014“These
targets are ambitious, I know, but they are here to stay and we
will stick to them,” insisted Crédit Agricole’s CEO Jean-Paul
Chifflet at the launch of the bank’s new retail banking

Under Commitment 2014, the
bank is targeting a 17% increase in group net banking income to
more than €40bn ($57.6bn) by 2014. The ambitious plan also includes
a 60% increase in customer deposits to over €30bn from
international retail banking operations in three years’ time, and a
20% increase in the international retail customer base to five

While its Italian and French
operations will be more innovation-driven, the bank is betting on
traditional banking services in Greece and Poland.

In Milan, RBI spoke to
Bruno de Laage, deputy Bar chart showing retail banking profits in Italy 2009 vs 2010CEO
in charge of retail banking and specialised financial services, and
found the bank initially vague on details.

But a later visit to the bank’s
TechnoLab and branch innovation project in Paris helped unearth
more specific details.

The conclusion: there is no
shortage of innovative ideas and ambition, but the bank is cautious
about aggressive launches for the sake of grabbing headlines.

At home, the bank expects savings
of €150m per year with the consolidation of its five regional IT
systems (a project called NICE) by 2013, which will later pave the
way for international consolidation of the system.

Crédit Agricole’s new retail
strategy will initially be applied in Italy, its second-largest
market with 963 branches, 1.9m customers and €84bn in deposits.

Bar chart showing branch expansion 2014The
strategy targets are bullish, but the bank fared relatively well in
the sluggish 2010 Italian banking environment (see chart, top
. It is investing €325m in Italy now, €120m of it in
multichannels to help attract 90,000 new young customers and spur
digital channel usage by 50%.

Transforming the bank’s debt-struck
Greek subsidiary Emporiki into a profitable unit, also outlined in
Commitment 2014, may prove a more onerous task.

Emporiki has been cutting staff
numbers, from 6,000 in 2006 to 4,650 last year, including 300 new
hires. Although reluctant to disclose exact sales per staff or per
branch, de Laage said the target is a 20% rise in Emporiki sales by
2014 and a reduction in the cost-income ratio from 71% to under
55%. The bank plans to close a net 10 Emporiki branches in 2011-12
to concentrate on areas with high sales potential.

This will leave a network of 337
branches with a new brand identity in the pipeline, but de Laage
remains silent about the details. Commitment 2014 advances
both the operation and the ‘look and feel’ of the branch, securing
faster and more personalised customer service and more efficient
branch operations on a daily basis.

In Poland, the bank is “starting
from scratch” to transform its consumer finance subsidiary Lukas
into a full retail bank, starting with traditional products and

Chifflet’s insistence on sticking
to targets is no blind ambition. Crédit Agricole is a conservative
colossus. It will focus on traditional products in Poland and,
obviously, its priority in Greece is to break even. Nonetheless,
while it says it wants to be innovative, it is in no hurry to and
is unlikely to be held up as representing best global practice by
this measure. Innovation is tested in Crédit Agricole’s domestic
French market, where consumers adopted direct channel banking long
ago. Each of the bank’s French caisses regionales conducts
its own experiments. A new service or product is only introduced to
the whole network if interest is assured.

In Paris, the bank has revealed how
its ‘Alpha Project’ branches are developing. They boast six
different approaches to customer relationship management:

  • video conferencing terminals
    to book appointment with advisers;
  • high-level desktops for
    side-by-side advice;
  • ‘sound showers’ that play
    music when a client stands directly underneath a particular spot
    (for potential deployment when long queues develop);
  • a videophone
  • a comments board which scans
    onto a computer and can be uploaded on the branch’s Facebook page;
  • infrared technology to count
    visitors (“500 per week”, according to Laurent Fromageau, the
    regional director for Paris).

Fromageau emphasised these branches
are for testing purposes only until 2013, when they will be

So far, the bank has attracted 400
volunteers to test and discuss the new approaches. The target is
1,000. The TechnoLab has been open for just over a year and
consists of three zones where consumers’ relationship with their
bank is tested: one zone is dedicated to branch banking, one for
at-home and another for the ‘in-store experience’.

At the lab, staff can test new
developments and devices, such as the Microsoft tables (branch
zone), the avatar technology-based website (for the home
experience) or the different payment methods in branch.

Now the bank is taking on industry
heavy- weights such as PayPal with its payments service kwixo.

The kwixo service was developed by
the bank’s IT subsidiary FIA-NET and enables payments via all
smartphones and the internet. Consumers will not have to switch

The market focus is on 20-24
year-olds, and the company expects between four and five million
users by 2014. The service will go live in Luxembourg, where
FIA-NET has its HQ, by year-end and in other countries in 2012 –
and the service will not be limited to Crédit Agricole’s

“We want to move from Gen Y to Gen
M [mobile],” FIA-NET CEO Christophe Nepveux emphasised.

e-wallet services, contactless technology and withdrawal
functionality via ATMs without a card are considerations for kwixo
version II, he said, adding there were ongoing negotiations with
“two major retail banks” in France.


See also:

Bruno de
Laage sets out Crédit Agricole’s Greek, Polish stall