Expert rating: Here’s why Coop is returning to banking

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As Migros, we are very happy to have our own banks in the group portfolio. The retailer’s financial institution contributed 240 million francs to Migros Group profits last year; This corresponds to 52 percent of the total profit. At Coop, there is no banking business anymore in the figures in the annual report.

Migros’ rival exited the banking business in 2017. At that time, Coop sold its entire share package to Bank Coop of Başler Kantonalbank, of which it has been a shareholder since 1999. The name was buried and the Bank Clerk walked out. At that time it was said “The end of a long-term process”. They want to focus on their core business. Cler customers were still able to take advantage of Coop’s Supercard program, but no more was possible.

Coop becomes a neobank

But oh, wonder! Coop is returning to banking. The announcement came from banking partners Kreditarbank Lenzburg and Glarner Kantonalbank. Coop had no further comment about Blick. This indicates that the release of the new app in various stores is imminent.

The business model is clear: Coop is becoming a neobank. That is, to a financial institution that offers banking services online and digitally. There will be no branch. The Lenzburg mortgage bank is responsible for the execution of banking operations. Clever. Because Coop doesn’t need a banking license. This saves cost.

However, Coop is in a highly competitive environment with its new offering. All the big players in the industry are involved. Did Coop miss the boat? «No, the timing is not unreasonable, because neobanks are slowly gaining traction in Switzerland. The train for new players has not left yet,” says Benjamin Manz (42), managing director and financial expert of the comparison portal Moneyland. But will “Hypi” and GLKB really achieve this? “Yes, both banks have plans to make the technology available to other banks,” says Manz. “He has experience in the field,” he says.

For the expert it is clear: “Conditions will be decisive. “If banking products are very good and cheap, customers also benefit from this,” he said. There is activity in the banking market. Just like credit cards. «If conditions are mediocre, customers won’t get much out of it. Then Coop’s new financial offer will not be successful,” says Manz.

Source :Blick