Tyme stands for providing simple, efficient and responsible banking. We work with our customers to unlock their potential through customer-focused, straight-forward financial products. 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.
To make this happen, Tyme introduces our commitments to current and future customers, investors, partners, and regulators to:
- Build and re-build your bank – over and over
- Partner with best-in-class solutions
- Design products and services to make banking simple, efficient, and responsible
- Bridge the gap with customers through digitally enabled distribution.
- Collaborate with ecosystem stakeholders to develop our regulations and infrastructure
Our commitments, and how we execute them day-to-day, are guided by high-level beliefs about what a bank should look like. Firstly, even as we embrace digitalization, banking must be designed to deliver value to customers by solving real problems for the broadest segment of people, where they live, work and transact. It must meet the financial needs of the hundreds of millions of unbanked customers worldwide that continue to operate in cash, that may be underserved, and that may operate outside formal structures.
Secondly, the next generation bank needs to meet the needs of its customers, extending well beyond money transfers and airtime purchases. Banking must help customers address liquidity gaps, plan for a better future, manage income gaps in the last week before a paycheck, and hedge against common shocks. Thirdly, banks still need a business model that can deliver this value at scale in a profitable, sustainable and socially responsible way.
#1: Build and then re-build your bank – over and over.
Having built digital banks in countries across Africa and Asia, we compare building a bank to building a city. A well-designed city is resilient and responsive to change, evolving as people and businesses change. The same is true for banks.
Thinking of bank management this way leads us to some imperatives for how we build our TymeBanks. Below we highlight three:
- Modularity in the modern tech stack: Modularity means we can continue to evolve, enhancing what we deliver and how we deliver without costly and disruptive technology rebuilds. We don’t need to be the best at everything – but it is crucial that we are distinctive in being able to plug-and-play the best-in-class, highly specialized capabilities of others in a seamless manner.
- Proximity to customers and their evolving needs: There are many ways to do this but our ability to ingest and analyze large amounts of data in real time is critical. We need to be able to interpret our customers’ usage behaviours and customer service interactions. But the job doesn’t stop there yet. These data insights must be designed into the continuous improvement of our products and channels, and our processes for doing this should be second-nature to us.
- Adaptability in our business and operating model: We need to remain vigilant against the threat of thinking in terms of “legacy revenue streams” – a major barrier to innovation in existing banks. We have often found that this leads incumbent institutions’ to be unwilling (rather than unable) to cannibalize existing revenue in favour of consistently delivering fair value to customers. Conscious of this, Tyme has structured its organization innovatively with the right incentives – such that when our costs or risks drop, we proactively pass on value to customers, consistently choosing long term success over short term profits.
#2: Partner with openness, technology and humility
The endless possibilities that new technology brings can be distracting. Remaining focused on delivering against your strategic priorities is critical and solving one problem very well has been the success of fintech.
But as a digital bank with the ambition to compete with the more established players to meet the full financial needs of the mass market, a more holistic proposition is required. To do this, partnering with the best solutions out there is the way we ‘build’ our bank.
Our goal is a curated platform offering best-of-breed services to our customers in areas beyond our core capabilities. This is done by partnering with carefully selected partners with aligned incentives to complement our core product set, such as our successful partnerships with AWS and Mambu, and joining initiatives such as the Asean Financial Innovation Network (AFIN) APIX platform to rapidly discover the best-in-class players globally. Getting this right will boost our ability to respond innovatively to customer needs with enhanced products, shorter time-to-market, and lower costs.
#3: Design products and services to make banking simple, efficient, and responsible
Customers are often either excluded from formal credit markets or have access to credit at prices that will eventually cause them to default. In the absence of an understanding of customers, banks and other lenders either charge usurious rates to account for often misunderstood risk, don’t lend to customers they should have, or push credit to customers that don’t need it.
Tyme has a different approach. We create one product for each product line – a savings account and daily transactions with no fees, a loan product that is easy to understand with no hidden payments – and we give our customers their credit score for free through our financial literacy solution. We use data to better educate our customers first and then second, to help us better design products for them.
Both data analytics and artificial intelligence allow financial service providers to better understand risk at a customer level, and extend credit to more individuals and businesses, at lower prices. However, there is a gap in the market between fintechs that are good at ingesting and analyzing alternative datasets, and more traditional bank credit departments that understand market risks, economic cycles, broader macroeconomic data and have access to traditional transaction data.
Tyme positions ourselves at the intersection of these worlds, with deep data analytics and artificial intelligence capabilities, access to traditional and alternative datasets, and decisioning that is grounded in economic analysis and understanding – while operating responsibly as a fully regulated banking institution.
In South Africa, Tyme achieves this by utilizing a broad array of data, such as retail basket level data that it has exclusive access to through its partners, unsummarised municipal and bureau data, mobile data, in addition to the Bank’s account-level transaction data. This enables us to price our loans cost-effectively and on a true credit risk-adjusted basis, in addition to extending credit to ‘thin-file’ segments that incumbent banks have traditional shied away from in emerging markets. Coupled with our financial literary app, TymeCoach (Figure 1) we gradually bring our customers into a positive virtuous cycle of building up creditworthiness, educating and incentivizing them on financially responsible behavior.
Gamification has seen strong traction among fintech solutions in the developed markets. We believe the concept has a useful role to play in emerging markets with the right behavioural nudges designed for the emerging market consumer. Our TymeBank GoalSave product is an example of such a product that incentivizes savings. It provides nameable savings pockets that have a higher interest rate (up to 10%) the longer customers keep their money in the pocket, accrues interest daily to help customers enjoy the tangibility of saving, and does not charge any penalties if customers want to take their money out – especially important for those without the financial buffer for unforeseen events in life. This is TymeBank working to develop positive financial habits.
#4: Bridge the gap with customers through digitally enabled distribution
Phone-enabled agent networks that extend well beyond any existing distribution drive the success of mobile money in Africa and elsewhere. This highlights the power of tech enabled high touch approaches when expanding financial access. Purely digital banks, while a significant improvement for customers from the more traditional banks, are simply not designed for the needs of most emerging market customers. At the same time, the costs of branch-based traditional business models simply do not allow for outreach beyond higher income, high density areas. For full inclusion in emerging markets, customers need the high-tech, high-touch engagement that Tyme offers its customers.
We believe in a world of high tech enabling high touch. In South Africa, Tyme welcomed 1,000,000 customers in ten months, a record among greenfield digital banks. We achieved this not just from our mobile app but through the combined effort of TymeKiosks, Tyme Ambassadors and TymeCode integrations into retail till points (Figure 2) to bring the human touch back to digital banking. Our digitized distribution delivered a better user experience and functionality across a broader footprint than our significantly larger competitors from day one. And South Africans responded positively – we are now fastest growing greenfield bank globally! TymeBank currently signs up more than 100,000 customers per month.
Despite our kiosks being designed for user-friendliness, we strategically chose to employ TymeBank Ambassadors, young men and women from the local communities, to engage with early adopters and repeat customers to inspire trust in the TymeBank account and solution.
With TymeCode in place, cash deposits are our second most popular transaction – highlighting cash is still king in the market . By integrating into the retail environment, we have gained our customers’ trust– our active customers swipe on average 7.5 times per month, gaining loyalty points and helping us understand their needs better.
Our approach works! First, in our pilot test in Indonesia, we opened 7x more accounts for our partner bank there through the TymeKiosk network than they had done previously through its branch network before the pilot. 98% of all new accounts were opened through the 150 kiosks network by May 2019 (versus 2% through the 36-branch network), with a ~80% reduction in the cost of customer onboarding per account for the bank.
In South Africa, for our own TymeBank, the results have been even more overwhelming. 84% of TymeBank’s first 1 million customers signed up through the TymeKiosk (even though we enable fully online onboarding). Equally important, we have been able to launch TymeKiosks without losing the cost and experience advantages of digital banks. Our cost of acquisition is 80-90% cheaper than traditional bank account opening processes, and cheaper than our fully online onboarding – notwithstanding our Ambassadors.
Through our TymeKiosk, TymeBank Ambassador, and TymeCode, we have proven that a digitized physical infrastructure in the right location with the right partner delivers the most cost efficient customer acquisition for digital banks.
#5: Work with ecosystem stakeholders to collaboratively develop our regulations and infrastructure
Customers and technology have not been the only things to change since we started on this journey. In our early days, the opportunity for regulatory dialogue and guidance was limited.
Today, however, many regulators around the world are taking a more explicit innovation facilitation role – especially when it comes to innovation that has the potential to drive competition and inclusion. We welcome this development and believe this enhanced level of engagement is already showing benefits for customers, providers and regulators.
We have successfully launched in markets without some of the basic building blocks, like an ID database. But the outcome is better for everyone when some key foundational elements are in place. Below we list a few of these:
- Regulator willingness to allow cloud competing, which has the potential to increase scalability, security, agility and cost-efficiency for financial service providers. Tyme’s risk teams are as risk adverse as any regulator we have come across, but we have become excellent at better managing risk within this new realm of possibility. By engaging openly with regulators, we understand their concerns, explain how we manage against the related risks and agree on ways of working that can give them (and us) the desired level of comfort, without losing the momentous gains on offer.
- Query-able ID databases and risk-based KYC regulations. We have the technology to fully KYC customers remotely in a matter of minutes. But this ability relies on risk-based KYC regulations, the existence of a national ID database, and an ability to query that database in order to run basic checks. We have successfully worked with third parties to get these queries down from days to a matter of seconds – but some basic infrastructure is still required.
- Access to data. Open banking regimes are becoming increasingly common, especially where regulators are concerned with the level of competition. In Mexico, regulators are pushing for digital payments over cash to advance financial inclusion. In Australia, regulators have signaled the intention to progress the open data regime beyond banking to include telecoms and utility data. Irrespective of whether these moves come from industry or the regulator, we welcome any change that gives customers more control over their data – whom it is shared with and how it is used for their benefit.
- Interoperability that lets suitably qualified new players seamlessly connect with existing players and their customers. Whenever regulators and industry can work to enhance the value from accounts and wallets, especially relative to cash, the better it is for everyone in the long term. Real-time, low-value interoperability is one way.
The core of our team has been working on breaking down the barriers to financial access in various forms for over 15 years. We’ve done this from inside one of the largest banks in Africa, through a founder-funded fintech, from a development finance institution, as a fully owned subsidiary of an even larger bank, and most recently as a fully licensed greenfield bank. We have always had a healthy sense of urgency and impatience which has kept us moving fast – designing, building and operating these different business units, fintechs and banks. This article is our attempt to take a moment to reflect on our vision and to share some commitments we think are key to achieving that.
There is a lot more that is required to successfully achieve our vision. We fully expect our views on these to evolve as we continue to learn. We welcome your views on these and other critical capabilities we may have missed. Share in the comments below or contact us at [email protected]