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Majorel Eyes Growing EU Banking Sector with ISILIS Acquisition

In July 2020, Majorel acquired French platform developer ISILIS, specialists in bank account switching. In this blog, I look at the new capability, the company’s focus on the banking and financial services sector, and the evolving CX services needs of EU banks.

Specialist in bank account portability

ISILIS was founded in 2004 initially to support non-regulated account switching processes between French banks and later developed a banking mobility platform. The ISILIS platform facilitates bank connections and information exchanges with issuers. Banks subscribe to the mobility service and when end users want to switch, they visit their new bank branch or register online for digital banks. Then a bank employee enters data on the white-labeled platform and the customer signs an agreement.

Using the French open protocol SEPAmail Aigue-Marine (SEPA = Single Euro Payments Area), the platform collects the last 13 months’ of historical transaction records from the initial bank based on the BIC and a unique IBAN identifier. It processes the information through a transaction database and transfers it to the recipient bank. ISILIS ensures the agreed file formats and specifications, follows the mandated timelines, and handles exceptions and non-responding banks. Finally, it informs the issuers’ bank, which notifies its issuers to update their database, move deposit amounts between the institutions, set up new standing orders, and update the customer’s payment partners such as energy, insurance, telecom, media, and public entities. The company also has a legacy portability process for unregulated accounts where it directly contacts the issuers. This legacy process is applicable for self-employed, sole traders, and in cases of divorce, a person switches from a joint to an individual account.

Today, ~80% of French banks are connected to ISILIS, including traditional and digital ones. The company supports its ~130 clients with ~30 employees in Paris and Laval, France.

Majorel’s BFSI expertise in German speaking markets

For Majorel, the acquisition adds a new, growing banking market in Europe and allows it to utilize its expertise in account portability from the German speaking markets. Majorel has a dedicated subsidiary for the service, called Kontowechsel24, which offers similar services with a proprietary digital banking platform with the following added functionalities:

  • Single sign-on
  • Integration with online and mobile banking
  • eSignature
  • Automatic recognition of payment partners
  • Option for e-vouchers to incentivize switches
  • Video chat module.

It also performs OCR/ICR recognition for the identification of payment partners from paper documents. Kontowechsel has ~20 clients with ~10k daily users. An example implementation is for the Austrian digital bank99, a subsidiary of Austrian Post. Majorel integrated the digital account-switching platform with bank99’s online system and mobile app and provides technical support, order processing, and other back-office tasks. Between April and June 2020, bank99 accepted more than 30k new customers with the majority using the switching service, and expects to maintain an average of ~150 migrations per day.

Expanding EU regulations

EU Directive 2014/92/EU for access to payment accounts and payment account switching for consumers is gradually being adopted in the member states: in Germany in 2016 with the ZKG act, in Austria the same year with Verbraucherzahlungskontogesetz, and in France with a Macron law from 2017. Some of the potential developments under review at the moment include cross-border account switching and the EU-wide portability of IBAN numbers.

Under a separate directive PSD2 for electronic payment services, EU banks need to improve the level of transparency for fees; for example, through independent comparability websites.

BFSI focus

Majorel is actively focusing on the BFSI sectors, which form ~17% of the business. It currently has over 45 clients in the sector, including traditional banks, direct banks, B2B banks, credit card issuers and credit institutions, as well as fintech, insurance companies and mobile banks. The ISILIS acquisition expands the portfolio of services. The company supports banks for inheritance beneficiaries to stop recurring transfers and direct debits. Since 2018, it developed an IBAN validation and fraud prevention service.

With growing population mobility in the EU and the rise of digital banks, Majorel targets the CX needs of banks from account onboarding and KYC to loan processing, upsell and cross-sell, payment support, and collections. For the French market with an estimated 6% customer adoption of banking portability, in 2021, ISILIS plans to automate its process for self-employed account holders using the know-how from Majorel Germany where the unregulated segment represents 80% of the market. It aims to reach double-digit adoption in France. In addition to activating its full Kontowechsel24 offers in France, the company is looking at Spain and Italy, which have less mature account-switching markets and have opportunities for multi-account management.

Majorel also wants to utilize the PSD2 capability for account mobility and centralized management in insurance coverage, and is currently piloting the insurance portfolio evaluation tool in Germany.

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