French telecom giant Orange has entered into exclusive negotiations with Groupama to buy up to 65% stake in the insurer’s banking unit to foray into mobile banking space.

The telecom company didn’t reveal how much it plans to pay for Groupama’s banking unit.

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The move forms part of the telecom firm’s Essentials2020 strategic plan, which aims for EUR400m of revenue from financial services in 2018.

Orange plans to launch a 100% mobile bank, Orange Bank, at the start of 2017 in France. The proposed bank will offer all standard banking services, including savings loans and insurance services.

Following its launch in France, Orange intends to extend its banking service to other European markets such as Spain or Belgium.

The 65% stake in Groupama’s banking unit will give Orange an existing infrastructure in which to operate, as well as a network of high street-based branches.

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Orange CEO Stephane Richard said: "Our partnership with Groupama, which has recognized expertise and key assets in the areas of both banking and insurance, will enable us to accelerate the implementation of our strategic ambition to be able to offer our customers Orange Bank services in France from the beginning of 2017."

Groupama CEO Thierry Martel said, "Orange’s technological leadership and the ubiquity of mobile phones will enable us to move forwards, faster and further, to create a bank that factors in all the possibilities and the fluidity that is inherent in today’s technology.

"In a word, and without revealing the innovations at this stage, Orange’s know-how and expertise in robust digital systems will enable us to go beyond online banking applications that are currently available on smartphones in order to transform users’ mobiles into a virtual bank and insurance branch that is always at hand."