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France's Caisse d'Epargne: "What matters is to be useful"

France's Caisse d'Epargne: "What matters is to be useful"

​​BRUSSELS, 12 February 2019  The FNCE or Fédération Nationale des Caisses d'Epargne, or National Federation of Savings Banks, is the WSBI and ESBG member in France. Proud of 200 years of history and a cooperative tradition, the FNCE looks to the future with confidence.

Major challenges must be addressed, however, so that the Caisses d'Epargne continue to be seen as financial institutions that bring added value to French society. One challenge is digital transition. Another is the inclusion of people and territories that feel excluded.

Federation President Jean Arondel, with General Manager Florence Raineix, share their insights in the upcoming edition of News & Views.

The ambition of savings banks after 200 years of existence

Talking with two people who occupy an important position in a banking association without cost / profit ratios, returns on investments and other technical concepts being mentioned might seem unusual.

Setting the tone from the outset, Jean Arondel says that: "as savings banks, our ambition is to be useful. We want to be where our customers are. This means in the regions, in the cities, in the rural communities. This desire to be useful, to offer simple, solid and sustainable services was the very reason for the creation of savings banks by Benjamin Delessert and the Duke of Rochefoucault-Liancourt in 1818. We are here to improve the quality of life of people with solutions in terms of things like savings, housing credit, investment credit.

“The French savings banks' ambition is to be even more useful by occupying a leadership position in the field of sustainable regional development, by pursuing our commitment to the local structures and local life and by strengthening the dialogue with stakeholders."

The Caisses d'Epargne are part of the same group as the “Banques Populaires", which together form a group headed by Groupe BPCE. How does that work out in practice?

Jean Arondel: “Very well! In fact, this model is not as rare as you might think. Look for example to the automotive industry where Citroën and Peugeot are competitors but are also part of the same group. In practice, the salesforce of the Caisses d'Epargne and the Banques Populaires have total autonomy. This creates a healthy level of competition that keeps us on the edge of our seats. And don't forget: a higher level of competition is beneficial to customers as well. They have more choice, a better level of service and prices that are more attractive. This competition does not prevent the two banking networks to work together to offer products and services. This cooperation is also highly developed between our two national federations. We meet on a regular basis to promote our business models and the interests of our cooperative members towards French and international institutions. As a federation, FNCE contributes to the strategic orientations of Groupe BPCE, which represents us at the Banque de France and the European Central Bank."

The Caisses d'Epargne are cooperative banks. Does the regulator take sufficient account of this legal specificity?

Jean Arondel: “First, allow me to say that we can be proud of the work that regulators and supervisors did during the financial crisis that hit us. They no doubt played an essential role. We must admit a certain tendency on the part of regulators to consider all financial institutions in the same way.

“It must be remembered that at all times, especially at the European level, the cooperative model and the savings bank model are extremely vital and that, compared to the traditional free-market model, these models are quite young since they were born just 175 years ago. One of its characteristics is the decentralised model. We offer proximity-focused services to our customers. We have a great future ahead of us, since our model involves the cooperative shareholder in the functioning of his or her bank. This goes well beyond a simple dividend or profit sharing. It is more a matter of adhering to a model based on a deep conviction."

Executive Director Florence Raineix continues: Our model, our organisation is in direct contact with local areas and it gives us extraordinary strength and vitality. Of course, we have to listen and interact all the time, but it allows us to know what our clients expect from us, as well as our shareholders. We are able to react rapidly and adequately and to accompany the economic and social development of our regions. We are in permanent contact with many grassroots organizations, such as “France Active", which fights against exclusion by financing companies that work based on solidarity. Another organisation, called “Rameau", encourages the development of innovative answers to the needs of the regions by creating alliances between companies, associations and public authorities. “BPW France promotes gender equality on the work floor.

“An example of what is possible thanks to this dialogue? In rural communities, you need a car to go to work. As the biggest personal microcredit bank in France, we have developed, in close collaboration with Renault, a lease formula with purchase option for new cars in order to offer a vulnerable public the opportunity to get to work safely and without having to cope with rather high fuel and maintenance costs.

“This is just one example and this is where the Federation plays its role as a hub of information and knowledge: solutions that are implemented in a region can benefit other regions."

As a Federation, it is also your responsibility to support the operation of the members. Does this idea still gather traction nowadays?

Florence Raineix: “More than ever. We represent a very young model! It is clear that nowadays, and more than ever, people have an urge to express themselves. They want to be listened to. Our interaction with our cooperative shareholders goes, however, much further than that. This interaction takes various forms, all based on listening and exchanging. The Caisses d'Epargne are proud to have dynamic shareholders with a high degree of proximity. These local shareholders are represented by dynamic local administrators who are part of the local socio-economic fabric. The Caisses d'Epargne opted for the cooperative model only in 1999, which makes us the youngest cooperative bank in France at just20 years of age. That is the age of vitality! In only 20 years, the Caisses d'Epargne have been able to create a special link with their shareholders, a link that is at the same time solid, dynamic and future-oriented."

A large organization like the Caisses d'Epargne has also to look beyond its national borders. What do you expect from Europe?

Florence Raineix: "We expect Europe to be close to European citizens, to deal with the real problems of the people. Europe needs to ensure coherence and not uniformity because diversity is a great treasure for Europe if it can be turned into a force. This is what the Caisses d'Epargne do every day with their clients and shareholders because they are regionally focused banks. The increasing use of digital technology in the banking relationship can lead to a loss of proximity. Being present in the regions, developing a proximity relationship, open for all, contributing to the local development and sharing experiences with a positive impact are the raison d'être of the Caisses d'Epargne. Europe should hold the same ambition."

What can ESBG do to help you in these ambitions?

Florence Raineix: “Just as the FNCE plays the role of idea hub at the national level, ESBG has to circulate good ideas and innovative and efficient practices on a European level and bring these to the attention of political and economic decision-makers. We must promote the image ESBG members as “proximity banks" that serves a maximum number of people and make sure that our activities are done with a long-term vision and to the advantage of all our stakeholders. WSBI should do the same at international level.

“I am thinking, for example, of financial education, a problem that exists all over Europe. We at FNCE have been present since 1957 in this area through our association effort called “Finance et Pédagogie". We are working in priority with vulnerable people who need real explanations, a didactic approach and not a flow of more or less precise information. This is where we really provide added value.

“Since we face similar challenges in different European countries, we need to pool our knowledge and know-how.  That pooling must also apply beyond Europe too. ESBG can help to truly create Europe's citizens, territories, and regions."

A last question to Jean Arondel. You are halfway through your mandate. What are your ambitions for the FNCE and the Caisses d'Epargne in general?

Jean Arondel: “We must absolutely support the digital transition. That is because technological innovation is changing our society, whether we like it or not. It is up to us to better support our customers, our employees, and our members.

“Beyond that, we must continue to dedicate ourselves to society, continue to serve the regions and meet the challenges of energy transition, job creation and solidarity. The ambition of the National Federation is to develop and reinforce the cooperative model of the Caisses d'Epargne. The Federation does this by working with them, by accompanying them in the important transformation that they are experiencing. We will continue the development of our operational mission by being also the place for exchange and dialogue between the Caisses d'Epargne."​

​The FNCE in brief.

The FNCE represents the 15 regional savings banks in France as well as their 4.6 million cooperative shareholders and the 3,122 administrators of the local savings companies (Sociétés Locales d'Epargne – SLE). The FNCE was created when the French Caisses d'Epargne adopted the cooperative statute in 1999. The FNCE is the official representative of the savings banks, promoting their specific business model and their interests towards authorities.​

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