Kapsul: Money-Back Guarantee by Société Générale

FACTS

• Société Générale introduces a low-cost bank account on an already crowded market with an entry-level offer called Kapsul, complete with value-added services, including a cashback programme.

• Targets: customers paying attention to offers’ prices, satisfied with an entry-level offer and used to digital channels.
• Features:
  • Current account
  • International Visa card without authorised overdraft (€1,000 in payments per month and €300 in cash withdrawals each week).
  • Advisors in branches to handle complex operations (basic services performed in branches when they may be conducted online are charged €5).
  • Digital account management services, incl. a dedicated mobile app.
  • Money-back guarantee: if not satisfied with the service, customers may switch to a higher-level offer or ask for their money back (the first 12 months, €24, are then refunded).
  • Cashback on card-based purchases.
• This product should be rolled out on January 28 and is in line with the bank’s transformation plan by 2020.

KEY FIGURES

• Cost: €2/month
• 1,700 branches selling Kapsul
• Profit expected by 2022
• Kapsul might help Société Générale increase their customer base by 10% (currently: 7M customers)
• Cashback programme launched in October with CDLK: €300,000 reserved for 60,000 customers

CHALLENGES

• Société Générale lands on this market later than other institutions, but their low-cost offer packs in value-added services, a cashback programme and a money-back guarantee. They try to address competition issues through providing their customers with access to human advisors available via instant messaging or by making an appointment online.
• Digital approach. The group’s branches are available to Kapsul customers, but only meant to help them carry out complex operations (credit or savings, for instance). As day-to-day services are charged, their advisors have more time to deal with value-added operations.  
• Addressing market pressure. Back in 2018, Société Générale started addressing competition from new banking players with Sobrio. Yet, this offer was charged €6.20/month, i.e.: more expensive than services featured by challenger banks or low-cost specialists. Kapsul is meant to address this issue.

MARKET PERSPECTIVE

• Competition from neo-banks, telcos or other retailers is partly questioned by long-standing banking players’ pressure on their own market. These new entrants don’t always hit success, but they reshuffle the game, causing established rules to be reconsidered with their low-cost, highly accessible offers.
• Banking institutions (LCL, Crédit Agricole, La Banque Postale, BPCE, BNP Paribas) started committing to adding entry-level products so they could withstand competition from these .
• Société Générale further compartmentalises their service range with an option matching rival pricing scales.