Singapore-based South African digital bank records first profit

Photo credit: SAINC

Singapore-based South African digital bank Tymebank achieved its first monthly profit in December 2023, less than five years following its launch. With 8.5 million customers, TymeBank ranks among the few standalone digital banks in the world to achieve profitability this quick. The majority of global ‘neo-banks’ (as branchless digital banks are often referred to) continue to be unprofitable.

TymeBank began operations in 2019 and pioneered the idea of offering of an account with no monthly fee. The bank has no physical branches. Instead, it operates through self-help kiosks that have been set up in in the retail stores such as Pick n Pay and TFG. Customers can open accounts and print debit cards at these kiosks using only their national identity cards and mobile numbers.  Biometric identification and other data is captured on-site. They can deposit and withdraw funds at any of the bank’s retail partners. Additionally, they can manage their accounts via the TymeBank app and its online banking platform.

TymeBank has introduced a buy-now, pay-later option, enabling qualifying customers to buy retail products by paying a third of the cost upfront, with the remaining balance spread over two months. In late 2022, TymeBank finalised the acquisition of small-business lender Retail Capital and it now finances the working capital requirements of over 50,000 businesses.

According to the Tyme Group executive chairman and co-founder Coenraad Jonker, the bank's unique distribution model has allowed it to onboard customers at a significantly faster than a typical digital bank. He claims that TymeBank has one of the world's lowest customer acquisition costs among its peers. Approximately 80% of the bank's customers sign up through its kiosks, which are typically staffed by a service representative, underscoring that many clients continue to value a form of physical interaction.

In 2022, the group launched GoTyme, a digital bank in the Philippines, through a partnership with the Filipino conglomerate Gokongwei Group. This venture has since attracted 2.3 million customers in just 14 months and has expanded its services by introducing a merchant cash advance product for small and medium-sized enterprises (SMEs). In the upcoming months, Tyme plans to also introduce its SME cash advance products in Vietnam, where it's estimated that only 25% of small businesses have access to formal finance.

According to Jonker, Tyme relocated its corporate headquarters to Singapore attracted by the city-state’s low tax regime and driven by a consideration that its Asian clients feel more comfortable doing business with a Singapore-based entity. In a statement regarding Tyme’s recent financial results, Jonker emphasised Singapore's growing importance as a hub for financial innovation and technology. 

References

‘TymeBank may soon be owned via Singapore, as Filipino version of bank takes shape’, Business Insider South Africa, 23 February 2021

‘Singapore and Africa: A South-South story’, International Finance Corporation, September 2022

‘Retail Capital officially becomes TymeBank's business lending unit’, News24, 06 December 2022

‘SHB supports women-led firms to access financial resources’, Viet Nam News, 08 March 2023

‘Revolutionizing Neobanking: unlocking profits and sustained growth’, Simon-Kucher & Partners, 25 October 2023

‘Tymebank hit first month of profitably in December 2023’, Newzroom Afrika, 16 January 2024

‘TymeBank achieves major financial milestone reaches profitability in under five years’, TymeBank, 16 January 2024

‘Singapore's Tyme Group delivers the world's fastest profitable standalone digital bank; over $215m annualised revenue’,TymeBank, 17 January 2024

‘MoreTyme’, TymeBank, Accessed 19 January 2024