TymeBank: proving that, with the right product, no market is impenetrable
There’s no denying that, over the years, the world of finance, and specifically banking, has undergone an evolution. The integration of technology with financial services means that there are now far more product offerings and services available to suit any and all consumers. A few ways that this sector has embraced technological change is through innovations such as online banking and mobile apps, smart machines and instant money transfers. Essentially, making banking more accessible and convenient, and eliminating the need for customers to spend hours in queues at their local branch!
Industry leaders have their feelings about the importance of innovation in the financial world. Co-founder and CEO of mobile banking startup, Moven, Brett King, said that ‘banking has to work when and where you need it. The best advice and the best service in financial systems happens in real-time and is based on customer behaviour, using Big Data, mobility and gamification’. This sentiment is echoed by industry strategist and owner of the Digital Banking Report, Jim Marous, who said that ‘financial institutions must be able to deliver an easy-to-navigate, seamless digital platform that goes far beyond a miniaturised online banking offering.’
One thought leader in the FinTech space is co-founder of Alloy Labs Alliance, JP Nicols, who claimed that ‘banks have to upgrade themselves, or risk being burnt to the ground.’ And, as harsh as it sounds, he isn’t completely wrong, at least in the metaphorical sense.
Time for TymeBank
When it comes to innovation one might think that there are enough hats in the banking-industry ring and that in order to be a standout success, one should try to disrupt other industries in dire need of a digital makeover. But the banking sector was overshadowed by investments, motoring and healthcare in 2020 when it comes to innovation. What this means is that there is still plenty of room for growth and improvement and that there are still opportunities out there to further reinvent the personal-finance game.
Enter TymeBank.
TymeBank is the first digital bank in South Africa, opening its proverbial doors in November 2019. Their mission is to empower the nation to take control of their money. They are doing this not only by charging low fees, simplifying the banking process and offering top-notch customer service but by also focussing on improving the financial literacy rates and changing the prevailing low-savings culture, with 48% of citizens not managing to save at all, according to the Human Sciences Research Council’s 2017 South African Social Attitudes survey. The three core values on which TymeBank is based are simplicity, transparency and affordability, which is, no doubt, why they have been such a big hit with local consumers.
This new edition to the FinTech space may not have been perceived as a threat at first, but by October 2020 they had onboarded over 2,1 million users, with 3 000 to 3 500 signing up each day. They are also now backed by billionaire Patrice Motsepe, with his company, African Rainbow Capital Investments, having invested over R750 million into this banking startup.
From startup to success
But what is it that has made TymeBank — a company still in its infancy when compared to legacy institutions — such a success? A number of factors. Firstly, their foregoing of building data centres in favour of private cloud storage, their superior customer service and their simplification of the banking process. The fact that you can download an app and open a bank account from your handset within minutes also appeals to their younger demographic, with 60% of their customer base being under the age of 36. What’s more, their in-store kiosks enable customers to onboard themselves from several national retail chains, which proved successful in rapidly growing their numbers.
TymeBank is the perfect example of how a ‘less is more’ approach can lead to great things. They only offer basic banking services and not loans, credit or a suite of complicated accounts, and have managed to disrupt the banking industry by offering an easy-to-use and cost-effective solution to what is currently available in South Africa. Stephán Engelbrecht, Portfolio Manager and Head of Research at Anchor Capital, said that ‘because we’ve had an oligopoly, it created the perfect environment for TymeBank to come in and undercut the significant profit margins that the banks were making.’
While we don’t know what the future has in store for TymeBank, if their growth rate is anything to go by, it certainly looks bright, as does the future of digital banking. May their success inspire other financial institutions to digitise, innovate and level-up their offerings to give South Africans more power, and more understanding, when it comes to their money.
Want to bring about innovative change in your traditional corporate sector? The Delta is a venture development company that co-creates businesses and products with leading corporations and entrepreneurs. Get in touch with us here.
Disclaimer: All views and opinions expressed in this article are the author’s own and do not represent the opinions of any entity whatsoever which The Delta have been, are now or will be affiliated with.
