SA’s fastest growing digital bank, TymeBank, has attracted mostly low-income earners, many of whom don’t use smartphones for banking, and will therefore be switching gears in a bid to triple its size by the end of 2020.
The bank, owned by Patrice Motsepe’s African Rainbow Capital (ARC), officially launched in April and managed to attract its first million customers in just seven months, thanks to its zero monthly fees that shook up the industry.
However, with just over 40% of its new customers active, TymeBank has its work is cut out for it in 2020 as it needs to nudge the sedentary base to start using their accounts regularly and also make sure that the 2 million new customers it plans to acquire in 2020 do transact.
TymeBank CEO, Tauriq Keraan, said the bank has picked up that roughly 70% of its customers earn R10 000 or less a month. As many of them still use feature phones, it means TymeBank must build features that a digital bank does not typically think of, such as ability to use USSD codes to perform basic transactions. From next year, the bank will also have brand ambassadors present at all Pick n Pay and Boxer kiosks all day to assist customers.
Initially the bank employed "ambassadors" to help customers open bank accounts at these kiosks. But now, it’s going to double the number of these individuals in Gauteng, and later in other provinces, to help customers use the account.
"It’s absolutely clear that we have appealed significantly to low-income and emerging middle-class customers. And that’s great for us because we set up the business to bring affordable financial services to that market," said Keraan.
"It’s been a huge learning for us. As you know, as South Africans we still need that face-to-face reassurance," said Keraan, explaining the reason for increasing the bank’s foot soldiers.
The appeal to that market means TymeBank is attracting the same kind of client currently being served by Capitec, which has also quickly grown to become the country’s largest bank in terms of customer numbers. It also means it is playing in the same space as African Bank, which also launched a new transactional account earlier this year.
Given the level of competition in that consumer segment, TymeBank will have to up its game beyond fees to stand out against these two, who have an advantage of large branch networks across the country. For instance, African Bank reported last month that most of its transactional banking customers opened their accounts at branches.
"I’m very positive that we’ll continue to grow even in that environment," said Keraan. "In the pick n Pay and Boxer channels, we know for sure that there is still an additional 15% to 20% additional productivity we can get there."
TymeBank acquires most of its customers through registrations at kiosks stationed at Pick 'n Pay and Boxer stores. Keraan said there were several kiosks that are not performing as they should, and TymeBank is enhancing their productivity.
The bank will also get more customers through partnerships with other companies in the ARC stable. As ARC has stakes in companies like Alexander Forbes and Sanlam, partnership with those could deliver millions of possible clients to TymeBank.
"In the early part of next year, ARC and TymeBank will make a joint announcement on the new partnership that we’ll secure. We are really excited about that. It will take us to a very loyal customer base," said Keraan, adding that more details would be released during the announcement.