Tyme is a digital banking group focused on empowering financial inclusion in emerging markets by integrating banking into physical retail ecosystems. Tyme originally started as a domestic remittance fintech in 2012 in South Africa, but quickly realized that the key to financial empowerment is through regulated financial institutions. In 2017, Tyme obtained a full banking license from the South African Reserve Bank and launched TymeBank in February 2019. Within 12 months from launch, TymeBank acquired > 1 million customers. TymeBank now has 3.2 million customers and is one of the fastest growing digital banks in the world.
Tyme stands for providing simple, efficient, and responsible banking. We believe well designed financial services can help even the most vulnerable in society take advantage of economic opportunities, and better deal with potentially devastating life events. At Tyme, we are driven by the conviction that broadening economic participation is the foundation for human growth. Digital technologies today offer us the tools to rebuild banking for the under-banked and under-served. However, we don’t believe that having a smart phone and using social media necessarily translates into a customer trusting a digital bank with their savings.
Launching a successful digital bank has universal challenges that all institutions will face, whether in developed markets or emerging markets, but digital banking in emerging markets does carry some unique challenges in order to gain a widespread, mass market customer base.
To be successful in any market:
• A digital bank must secure meaningful access to customers. A first interaction seems easy on a smartphone, but these can actually be very difficult to manufacture. Most potential customers are blind to digital advertising, and onboarding on the phone can be cumbersome for even the most digitally savvy. Combine these challenges with the need for the customer to first download an application before they get to the onboarding process, and you are asking a lot of a customer you have never engaged with before. The negative cost effects of this are compounded by the fact that the ability to acquire customers is constrained by marketing spend, and creating brand awareness through digital advertising often reduces efforts in customer education, a crucial element of long-term digital banking customer adoption and financial return. In our experience, the costs of acquiring customers are really the costs of acquiring active customers, and education, not brand awareness, determines the activity level of a customer.
• A digital bank must develop a strong trust relationship with the customer. Trust in the digital banking brand is the single most important indicator of continued usage. Creating trust is difficult even in markets with strong depositor
protection. Creating trust takes time and is expensive, requiring significant investment by the digital bank. This starts with a positive onboarding experience, but customer onboarding processes can be intimidating leading to substantial drop off. And, while the apps may be easy to use, a customer’s lack of understanding of the channels and products can translate into no or low usage of many services.
The above challenges are universal to all digital banks, no matter how developed the market, but digital banking in emerging markets with lower access to financial services and digital and financial literacy brings several new challenges. A digital bank must engage even closer with its clients to secure both the access to the customer and, more importantly, the trust in order to gain long-term adoption and active customer usage.
More specific challenges to digital banking in emerging markets are:
• Ease of cash in – cash out: A digital bank must ensure the ability to easily move cash to digital and back to cash. Currently, over 90% of transactions are cash-based in emerging markets so cash is still king. This means that to believe in digital money, customers must also believe that they can turn cash digital and back anytime they want. There must be as little friction as possible in daily spending patterns and transacting, as cash has its issues but has little friction in transacting.
• Ease of location: A digital bank must have ubiquitous points of representation. Customers will only test out the digital bank if it is easy to find and engages the customer where the customer already is. In emerging markets, a digital bank builds trust through physical locations, where customers can see the institution in their own respective ecosystem. Customers will only continue to use the digital bank’s products and services if the digital bank is embedded into the customers’ ecosystem.
• Ease of understanding digital channels: a digital bank must meet customers where they are in their digital journey. Customers are looking for their digital bank to walk the path to digital with them. Channels must reflect where the customers are now and enable them to steadily engage digitally together. The assumption that all (or even the majority) of customers are already digitally savvy and ready for digital financial services risks offending the customer – a dead end for all engagement.
• Ease of understanding products: a digital bank must engage deeply on its product mix and not err on the side of too many or too complex products. Payments can be the ticket to play, but it is not the prize. While also addressing
100% of the market’s needs is too complex and leads to too large an organization, a digital bank that meets too few needs translates into the game of diminishing returns as the digital bank is too easy to substitute.
The above is the conceptual framework in which Tyme launched TymeBank in South Africa. In solving these challenges, we took a customer-centric approach that looked at the average South Africans’ daily challenges and established solutions and channels which would unblock any impediments that they have in accessing banking in their own individual ecosystems.
Retail outlets with a national footprint was our first step to secure ubiquitous points of representation in the customer’s ecosystem. TymeBank formed a long-term strategic partnership with PicknPay and Boxer stores, allowing its customers to bank where they shop, at PicknPay and Boxer stores around the country. Customers can both onboard and activate the account at the stores, allowing customers to engage in their banking in their most used ecosystem, their grocery store.
Secondly, to enable easy customer onboarding, we developed the TymeBank kiosk which opens a fully KYC’ed bank account in under 5min, without the need for any paperwork (just an ID number and a cellphone). Customers can open a fully FICA-compliant bank account and receive their personalized Visa debit card at a TymeBank kiosk in under five minutes. After receiving the debit card, customers may transact straight away at the store cash register, allowing easy cash in – cash out while buying your groceries. This means that across South Africa, customers have 14,000 till points (cash registers) for cash in – cash out, embedded right into their grocery shopping experience.
And third, to provide customer education, we placed Ambassadors at these kiosks in the retail outlets. The Ambassadors assist customers through our digital onboarding journey as well as educate them on how to use our products in our channels. Our in store Ambassadors are local, formally unemployed youth from the local community
who play a pivotal role in driving customer trust.
Using this approach, TymeBank fundamentally changed the banking landscape in South Africa by offering easy to access, transparent, and customer centric financial products and services for the mass market – for all South Africans. With our success in South Africa, Tyme’s next deployment will be in the Philippines. With over 70% under-banked and unbanked, the Philippines is the ideal next market to test Tyme’s unique model for digital banking.