The two companies aim to create a "new banking model", they said, in a move that would involve Orange buying 65% of Groupama.
Orange Bank will launch in France at the start of 2017 if negotiations are successful, and then expand into other European markets such as Spain or Belgium, the companies said. Orange said the new mobile bank will offer all standard banking services plus savings, loans and insurance.
Stéphane Richard, chief executive of Orange, said that the group aims to diversify its operations and sees "important growth prospects" in mobile banking. Orange has already launched a Orange Money service in the Middle East and Africa, and is also behind Orange Finanse in Poland.
Thierry Martel, chief executive of Groupama, said: "Orange’s technological leadership and the ubiquity of mobile phones will enable us to move forwards, faster and further, to create a bank that factors in all the possibilities and the fluidity that is inherent in today’s technology."
"Orange’s know-how and expertise in robust digital systems will enable us to go beyond online banking applications that are currently available on smartphones in order to transform users’ mobiles into a virtual bank and insurance branch that is always at hand. We are working on a genuine Bank 4.0: once you have tried it, it will be difficult to do things any other way," he said.
Financial services expert John Salmon of Pinsent Masons, the law firm behind Out-Law.com, said the partnership highlights the potential advantages for banks and mobile providers in bringing together their expertise in the mobile banking market.
"Businesses that combine banking and telecoms expertise will be well-placed to take advantage of the mobile financial service enablers that are likely to become realities across Europe over the next few years – from opening accounts solely through the use of a digital ID to understanding how to save, invest and better engage with our finances through insights gained from location data and financial data," Salmon said.