TymeBank to add million customers
CEO downplays primary accounts in favour of relationships with clients
Patrice Motsepe’s new bank has its eyes set on adding another 1-million new customers in 2020, when TymeBank launches its first lending product and a more sophisticated business offering.
Billionaire Patrice Motsepe’s new bank has its eyes set on another 1-million new customers in 2020, when TymeBank launches its first lending product and a more sophisticated business offering.
The bank formally opened its doors in February 2019 and has already opened 1-million accounts in the space of nine months, exceeding its own targets. Thus far, its owners are happy with the progress.
“The bank’s success is testimony that access to financial services can be broadened for the benefit of those members of our communities who historically have not been involved in the banking and financial services industry,” Motsepe said in a statement.
Innovation and increasing the accessibility of banking products to the unbanked and underbanked were among the strategic reasons for the Reserve Bank’s issuance of additional banking licences. Apart from TymeBank, banks such as Michael Jordaan’s Bank Zero and Adrian Gore’s Discovery Bank got the nod.
TymeBank CEO Tauriq Keraan said converting the accounts opened into primary bank relationships — defined as accounts in which customers have their salaries paid — is desirable but not the bank’s holy grail.
“We don’t need to be the primary bank account. We have built the bank in such a way that we can have different types of relationships with different clients. So, we don’t need to have a primary bank relationship in order to lend or sell third-party insurance,” said Keraan.
The bank’s envisaged offering has remained largely intact – bar one or two additions. Keraan admits they had to add electronic payment confirmation functionality and the ability to send e-money by SMS-ing electronic vouchers that can be redeemed for cash partner Pick n Pay or Boxer stores.
The bank’s executives have also been pleasantly surprised by the demographic spread of its clients.
About “50% of our customer base earns about R5,000 per month or less, but the affluent and wealthy are also signing up because they are rebellious or fed up with their current arrangements, or they want to save aggressively through one of our goal save accounts,” says Keraan.
TymeBank plans to launch its first lending product in the form of an unsecured term loan, which it has been piloting for the past few weeks, early in 2020. The development comes at a time when established competitors such as Standard Bank and Capitec have been targeting the unsecured lending market after a period of relatively benign credit extension.
The lending product will be augmented with a more sophisticated business banking account scheduled to follow in the second half of 2020.
“Following our launch, we learnt that a subset of our customers were also using the account as a business bank account, and they have expressed a preference to keep their business affairs separate from their personal finances. So we developed a small business account that is the mirror image of the consumer bank account, but we intend to launch an account that can accommodate corporate entities next year,” says Keraan.