Banque Accord is a subsidiary of the financial giant the Auchan Group
Founded in 1983, Banque Accord was established in two stages: In 1983, with the issuance of “Accord” retail cards in Auchan’s hypermarkets; and, in 1987, with Auchan’s acquisition of Banque Delort, a subsidiary, an affiliate of the banking group known as Credit Commercial de France.
Auchan subsequently called its newly acquired bank as “Banque Accord ”.
The newly acquired bank’s mission was to customize the rules that have proven successful in the area of retail distribution and bring it to the financial services field, by allowing consumers to avail of simple yet innovative discounted products and services.
Essentially, Banque Accord operates as a bank aligned with the credit and retail industries in general.
Put simply, Banque Accord brings electronic banking functions to retailers, and payment and financing options like cards and consumer credit, closer to its consumers. As a rule, the purchase of financial resources is backed by sound ratings from globally respected institutions like Moodys and Standard & Poor. For the year 2006, Banque Accord received higher ratings compared to the previous year.
Moody’s gave the bank an A2 grade, while S&P gave it an A or “Stable” rating.
To note, the word “Accord” suggests being able to agree on “financial solutions” for the company’s clients8. The dynamism of Banque Accord, which eventually became well-respected in international financial circles, is due to the fact that it is wholly-owned by a bank and a retail group.
In Banque Accord’s financial disclosures for 2006, the company reflected a EUR353,167,000 increase in assets in just 12 months. Banque Accord also reported a net income of EUR34,413,000 in 2005, as compared to EUR24,206,000 in 2004. Despite the potential for further international growth, Banque Accord has to contend with possible areas of difficulties, which include:
(a) the use of mobile phones as a potential replacement for bank cards in transactions;
(b) innovations in consumer credit;
(c) the development of e-business in the retailing industry.
Regardless of these trends that Banque Accord has to contend with, the bank continues to be innovative and continues to explore newer concepts to maintain its prestige and originality in the banking and retail industries.
Banque Accord: A Case Study 2
I. The Auchan Group Founded in 1961 by Gerard Mulliez, the Auchan Group started out in the North area of France with one hypermarket, which, simply defined, is a commercial complex that combines a department store with a supermarket. Currently, in 2006, the Auchan Group runs 360 hypermarkets spread across 11 countries. In France, Auchan operates 654 supermarkets. Since the inception of Auchan, the company’s vision has remained the same. That is, to improve the purchasing power of its customers. Banque Accord is an Auchan subsidiary that has developed an identity of its own within the Auchan Group. Nevertheless, Banque Accord’s mission is identical to Auchan’s, and in essence, the bank has a dual vision:
customer-oriented: providing its clients with a means to purchase;
corporate-oriented: assisting Auchan in maximizing turnover and revenue, therefore aiding the Group to reduce costs. Accordingly, Banque Acord’s mission, “The bank for consumers” is aimed towards Auchan’s clients at the hypermarkets.
Banque Accord achieves its mission by making available to Auchan’s clients, certain services like discounted financial options and payments which are directly accessible to these clients. Being a part of the Auchan Group is a contributing factor to Banque Accord’s human resources practices: By training a group of responsible professionals who consider their jobs fulfilling, the company is able to achieve growth and guarantee their clients quality service.
II. Banque Accord’s Internal Strengths
In studying the case of Banque Accord, one is accosted with the company’s inherent strengths. Whatever weaknesses there might be for the company, these are easily addressed based on the operating standards adopted by the Bank.
Nevertheless, the inherent strengths of the Banque Accord include:
A. European Market Share
The card can be very much compared to a traditional bank’s checking or current account, which is most convenient for customers to use. Retailers or outlets that have tie-ups with bank cards are able to sell “progressively”, in coordination with various financial services like cross-selling or up-selling. The European market where Banque Accord mainly operates was reportedly worth billion in outstanding credit in 2005 (Source L’observateur Cetelem) and is manifesting fast growths in many countries. Within Europe, where Banque Accord operates, there are distinct differences between countries. In Great Britain for example, the average outstanding credit per household is double that of France’s. In simple words, buyers in Great Britain have greater use for bank cards than customers in France do. The differences between countries may be attributed to diverse cultural orientations, regulatory requirements, and marketing procedures. Another example is: frequently, young people are refused credit on the grounds that they do not have a stable means of paying it. On the other hand, it is quite common for a consumer to accumulate excessive credit. A solution to this would be the use of regulatory systems and which monitor and prevent bad debts.
B. Positioning and Diverse Services
The business of Banque Accord is:
(a) issuing different types of payment cards like for example, retail cards, gift cards, and bank cards;
(b) proffering consumer credit and other related services;
(c) managing its retail partner’s electronic processing of monetary transactions.
Electronic Banking is a technical service directly given by Banque Accord to its retailers, which is a source of pride to the bank31. Its electronic banking services are geared towards functioning as a bank –
Banque Accord: A Case Study 4 2005, to form a division called CardOps. Being owned by a retailing group, Banque Accord’s aim is ATMs, payment terminals, etc. Banque Accord’s electronic banking services were grouped together in proximity to its customers, and minimizing the costs of electronic banking. The core business of Banque Accord is the issuing of a range of cards, which have different functions. The bank’s cards may be a type of payment, a retailer’s marketing tool, a “support” product of the bank that is incorporated in its associated services. It is widely said that an Accord card may be likened to a Swiss Knife with flexibility in functions — credit card, payment card, and loyalty card.
Banque Accord: A Case Study 5
Function: This type of card may be utilized to personalize service, and enhances customer relationships.
Banque Accord: Auchan Gift Card Hence a card is useful to the retailer because it can be used as a marketing instrument and promotes consumer loyalty to the consumer because it is a convenient means of financing and payment. There is a distinct connection between owning a card, how the type of card benefits the customer and the retailer, and the amount of business the customer does with the retailer42. It is established that a customer who has access to credit through cards increases his or her purchasing power. A client who has no card hardly visits a retailer in a month, owning a loyalty card enables a customer to make three visits. Having a retail card allows the client to make four visits per month to the favorite retailer and having a bank card gives the client the opportunity to make at least five visits to the retailer. Banque Accord boasts of an orientation that is discount-oriented and customer-oriented.
Banque Accord has two selling and pricing concepts: — annual subscription and — cashback, which is defined as the money paid to the customer related to this or her card use. For example in France, Banque Accord gives a 40% discount incentive to annual subscribers for a regular Visa Card and a 60% discount on a Visa Premier Card. Based on the spending habits of the customers, an annual subscription increases the potential for the clients’ purchasing statistics.
Other Financial Products
Apart from cards, Banque Accord also offers its clients other services, like:
in-store credit wherein the individual retailers define their own credit policies along with different formulas for achieving revenue;
personal loans, which are granted to customers as a come-on, at interest rates based on current market prices;
revolving credit, which is built up by a credit reserve;
Auchan savings account;
life insurance, which is a tie-up with Suravenir and offers life plans at simple and reduced costs;
As evidenced by the wide range of “other” services that Banque Accord offers, its value chain is distinguished by a huge number of product alliances. Thus, Banque Accord has been known for its flexibility. As a result, the bank has largely-increased the potential spending capacity of its client-base. Sometimes, the bank’s products are managed by other partners — at times their competitors — depending on which country the operation.