The stage is set for South Africa ’s new fully digital bank, TymeBank. The bank is on track to hit one million customers by the end of the year. Its current customer base is just a few numbers close to 500,000 customers.
A Look At TymeBank
- If you are looking to find any physical branch of the bank in South Africa, you may have to look harder. This is because there is none. The branches exist only in the clouds, that is, the bank is only digitally focused. In February, it launched its EveryDay transactional account bundled with a savings tool called GoalSave, its MoneyTransfer solution, and its TymeCoach App, which gives consumers free access to their credit report, supported by tips on how to make better decisions about the money.
“We are planning to introduce credit products later this year, as well as an SME (small medium sized enterprise) proposition, but for now our focus is on getting simple and cost-effective banking solutions into people’s hands,” said TymeBank chief executive officer, Sandile Shabalala. “Our mission is to drive meaningful financial inclusion, by making banking more accessible to all South Africans. We see it as our responsibility to take the complexity out of banking for consumers and to give them insights into how the financial system works.
“We believe that uncomplicated banking coupled with relevant knowledge will empower people to make more informed and responsible decisions about their own financial futures. Why shouldn’t banks be more transparent with customers about what they are paying for?”
TymeBank is owned by African Rainbow Capital (ARC) Financial Services, a company within billionaire Patrice Motsepe’s Ubuntu-Botho Investments stable. It is South Africa’s first majority black-owned bank focused on retail and business banking.
ARC bought the bank from the Commonwealth Bank of Australia in November 2018.
“TymeBank brought synergies that are complementary to ARC’s existing insurance and asset management businesses. Given ARC’s focus to, mostly, invest in businesses with established client pools, we’ll be looking for synergistic opportunities to the benefit of both the client and TymeBank,” said Tauriq Keraan, deputy CEO of TymeBank.
The latest figure came from the digital bank ’s latest investor prospectus, which detailed its customer acquisition since launching in February.
Chief executive officer, Sandile Shabalala said the group is averaging 100,000 new customers each month.
After bringing on board around 40,000 clients during its ‘soft launch’ phase between November 2018 and February 2019, the bank moved to a high growth phase where it was adding 4,000 new clients a day.
The bank said that it has a total addressable market of around 21 million customers in the middle market, as well as 2 million small-to-medium enterprises, which opens up the potential for products and services it wants to introduce.
TymeBank is looking to disrupt traditional banking in South Africa whose operations are usually expensive to maintain.
“We are leveraging our cloud-based technology which doesn’t come with a legacy burden and it’s one of the many reasons we’re able to pass cost savings onto the consumer. We have built an open banking platform, which allows us to move with speed with the partners we engage with,” said Shabalala.
The Bank Is Relying On Partnership As Its Strength Both For Money Deposit Or Withdrawal
TymeBank has created a network of partners including Pick n Pay and Boxer, with the former’s Smart Shopper program now fully embedded into TymeBank’s technology stack.
“We’ve partnered with companies whose business ethos aligns with what we want to do in the market, which is to do good. The customer will always be at the centre of our banking practices and going forward we will be doing some really exciting things with our partners, it will go way beyond just occupying floor space,” said Shabalala.
The implication of joining forces with Pick n Pay and Boxer stores is that TymeBank now has access to a relatively significant distribution edge.
“By the time we complete our bank kiosk roll-out we will have 730 points of presence where customers can open accounts inside a Pick n Pay or Boxer store — we have over 500 bank-enabled kiosks in the market today.”
Even in stores without a bank-enabled kiosk, customers can still do their everyday banking transactions, TymeBank said.
As part of its acquisition strategy, TymeBank said it will further leverage its partnership with Pick n Pay and Boxer stores, which gives it access to 730 physical stores across the country, where customers can withdraw money free of charge and deposit money for just R4, said Shabalala.
“We have a strong proposition, which competitors will find hard to match right now and the tens of thousands of customers that have opened and are using their accounts are testament to that,” said Shabalala.
TymeBank is part of a trio of banks launching into the South African market in 2019, with the other two banks including Bank Zero, the brainchild of former CEO of FNB, and Discovery Bank.
Again, Rain has recently entered into a partnership deal with Tymebank to test the distribution of its SIM cards at Tyme kiosks, making it easier for its clients to sign up for a new service.
TymeBank’s Strategy Is To Make It Simple and Cheap For Customers
Indeed, signing up to the digital bank could cost little or nothing. No documents are required and no charges demanded.
To open an account, you need a South African ID number and a South African cellphone number, which the bank verifies through several questions and a One-Time PIN (OTP).
If the process is done at a kiosk, biometric data will be captured and compared to the data with Home Affairs, which is connected to the Tyme systems, and a free Visa debit card is issued immediately.
If done online, you will have access to your account, but it will be limited in how much you can transact until you go to a kiosk and “upgrade” your account (for free) to a full account through capturing biometric data and registering your residential address.
Getting a debit card is free and immediately.
Service Fee for new registration is free. There is no monthly account or withdrawal at Pick n Pay and Boxer stores, only R2 at other major retailers.
By July 2019 Customers Can Borrow From TymeBank Without Collateral
TymeBank’s CEO, Sandile Shabalala, has also told analysts and investors that the digital bank would start piloting unsecured term lending in July and a credit card in partnership with consumer lending company RCS later in 2019.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.