Fidor Bank: the community's bank, 2394 days

Chapter 1 · Before Day 0 · 2009 to 2016

The community bank

In 2009 Matthias Kröner founds a licensed internet bank in Munich and names it Fidor. The idea is new for its time: a community bank.

Customers don't just open an account, they become part of a community inside the bank. In a forum they ask each other money questions, suggest product ideas and rate each other's advice.¹

In 2012 comes "Likezins": every 2,000 likes on Fidor's Facebook page add 10 basis points to the savings rate. On the account screen, gold, crypto and even World of Warcraft gold sit next to deposits. A new sign up costs Fidor about 1 euro.²

The community grows: 160,000 people in mid 2013, 310,000 at the end of 2015. 100,000 of them are full account holders. Deposits grow 48 percent in a year to 400 million euros. The bank is small but profitable: 2.4 million euros of profit in 2014, 0.2 million in 2015.^1,3

But Fidor's real secret sits on the side nobody sees. The software that runs the bank, fidorOS, is open through APIs. That means Fidor can sell the same platform to other brands.

It's 2015 · Your call

You have a small, profitable, well loved bank and a platform you could sell. Where does the first growth money go?

What Fidor did

It chose A and B at the same time.

It opened in the UK in September 2015 and in 2016 launched o2 Banking with Telefónica Deutschland. In its first months in the UK it had won around 1,000 customers.^3,4

Chapter 2 · Day 000 · 28 July 2016

The big family

An announcement from Paris: Groupe BPCE is buying Fidor Bank.

The announcement carries no price; the press reports about 140 million euros.^5,6

BPCE says clearly what it wants: to use Fidor's API based platform inside the group, to speed up its digital transformation and to support Fidor's international growth. Fidor will stay independent, under its own brand and led by Kröner.⁵

Kröner's line is on the record too: in a world of increasing volatility, it is important to be a member of a strong group.⁵

You are the group's digital team

You have just been handed a working banking platform and a community of 350,000 people. Where does the first project go?

What happened

Fidor did not move into France.

Two years later, the picture in the press is this: BPCE directed its digital investment to its own brands.⁶ We found no public record of fidorOS being used in the group's banks.

Chapter 3 · 2017

A loan book

Fidor closes 2017 with a pre tax loss of 110 million euros. In the years before, profit sat between 0.2 and 2.4 million.

Where does the gap come from? Most of the loss comes from a lending business in the UK. There, Fidor had extended corporate loans to two companies that finance used car buyers, its business partners in that market.⁷

When both companies ran into difficulty, 88 million euros had to be written off in 2017. The companies are not named in public sources. In 2018 the loss falls to 41 million euros; we could not find that year's breakdown in a public source.⁷

Your call

You are in a new market. Deposits are coming in, but you have few borrowers of your own. How do you grow the loan book?

What Fidor did

It was built the B way.

Fidor's large UK loan exposure was built through partners, and most of the 2017 loss came from there. BPCE stood behind the bank with capital and a loss guarantee.⁷

Lending through a partner is sometimes the right path, as long as it is clear from the start where the risk sits.

Chapter 4 · Day 830 to 1144

Two departures

In November 2018 Fidor is put up for sale.

On 2 April 2019 it is announced that founder and CEO Matthias Kröner is leaving after ten years. His goodbye goes to the staff: they always worked with all their heart, and together we wrote a page of banking history.⁸

On 1 July Fidor announces it is leaving the UK, and services close on 15 September. The reason given is uncertainty in the UK market.⁹

Chapter 5 · Day 1371 · 29 April 2020

One in five

The middle of the pandemic. Telefónica Deutschland and Fidor part ways on o2 Banking.

Since 2016 Fidor had been behind the accounts sold under the o2 brand. About 70,000 customers, one in five of all Fidor customers.¹¹

The official reason is short: both sides will now pursue their goals separately. o2 says the new partnership will open new options for developing its banking offer. On 31 May o2 Banking relaunches with comdirect; the new package has a free girocard and Visa card, free ATM withdrawals worldwide, Apple Pay and Google Pay.^10,12

Was the real reason the product package, the cost, or something else? We don't know. Neither side said. There is also no public figure on whether the business was profitable for Fidor.

Your call

You give a telco a bank account under its own brand. What is the first thing you write into the contract?

What happened

Customers moved their accounts themselves.

When the partnership ended, customers did not move to comdirect automatically. Fidor told customers it would send details on closing the account and next steps within a few days.¹¹ We don't know what the contract said.

Chapter 6 · Day 1467 to 1617

The pieces go their own way

In August 2020 BPCE enters talks to sell the bank to Ripplewood. By the end of the year Fidor is split in two.¹³

The software side, Fidor Solutions and fidorOS, moves to Sopra Banking Software on 31 December 2020. That sale completes. In Sopra's words, Fidor Solutions brings ten years of experience pioneering APIs and building digital banks from zero to success. The platform serves banks in Europe, Africa, the Middle East and Asia.¹⁴

The sale of the bank to Ripplewood does not complete. Neither side has given a public explanation. What we know: when the closure was announced, BPCE still owned Fidor Bank.¹⁵

Chapter 7 · Day 2394 · 16 February 2023

The decision

The announcement goes out. Fidor will end its banking business within 2023. About 160,000 customers.¹⁶

The message is calm: you don't need to do anything right now, we will contact you soon to start closing your account, and you will have enough time to move your banking elsewhere.¹⁷

Your call

The decision to close is made. 160,000 people have their salary, rent and direct debits in these accounts. What do you offer them?

What Fidor did

Path A was taken.

Customers moved their accounts themselves; the record shows no recommended partner bank.¹⁶

Last day · 16 February 2023

What was left

Fidor had three parts, and the three went three different ways.

1The platform lives on.fidorOS became part of Sopra Banking Software's digital banking platform and kept running underneath other banks.
2The B2B customer left.o2 Banking moved to comdirect.
3The bank and its customers dispersed.The bank that stayed with BPCE closed, and 160,000 customers chose their own way. We found no public record of Fidor's platform or customers moving into BPCE's own banks.

fspark9 note

Fidor had two strong things: a loyal community and a platform it could sell to other brands. Looking back, the question on our mind is this: would the story have changed if both had grown on a more patient plan?

On the community side, keeping something that worked going for longer, and more stubbornly, was an option. The loan book could have grown from within the community, more calmly and more slowly. New markets could have waited until the model had fully settled at home. When lending grows first in a market you know well, with your own customers, it is much easier to see where the risk sits.

On the platform side, the o2 split looks like a fork in the road. A bank like this could be thought of as three separate businesses: a BaaS bank serving other brands, a community based digital bank, and the software underneath both. Each could run with its own goals, its own team and its own numbers, and if needed some could be sold and some kept. A large group with capital, patience and distribution is one of the best places to carry a split like that.

None of these are easy calls in the conditions of the day, and looking from the outside is always easier. But when a strategy writes down from day one which business grows when, and which market opens when, there is a map in hand on the hard days.

Last day · 16 February 2023

Thursday. The Fidor app still opens, the cards still work. But now everyone knows. The clock stops at 2394.

One last question

It's 2015 and you are at Fidor's table. What is your plan for the next three years?

You have a community, a small but profitable bank and a platform you can sell to others.

This story is built from public sources

If you spot a mistake, write to info@fspark9.com and we will correct it with a note.

The community's bank, inside a big family.

The community bank

It chose A and B at the same time.

The big family

Fidor did not move into France.

A loan book

It was built the B way.

Two departures

One in five

Customers moved their accounts themselves.

The pieces go their own way

The decision

Path A was taken.

What was left

It's 2015 and you are at Fidor's table. What is your plan for the next three years?

If your story is just beginning, let's build it together.