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TymeBank Becomes First South African Digital Bank to Hit Profitability after 4 Years

By Oluchukwu Ikemefuna

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The sole aim of a capital market is to make profits while providing quality services to its customers, and TymeBank has checked all the boxes on the aim of capitalism. TymeBank achieved a historical feat in December 2023 when they announced that they will be closing the month profitable. 

Being the first digital bank to break even in South Africa, this milestone underscores TymeBank’s rapid ascent in the global digital banking landscape. In this post, we’ll be reviewing everything you need to know about TymeBank and its groundbreaking achievements that have been making waves in the digital banking world.

What is TymeBank?

TymeBank traces its origins back to June 2012, when a team led by Coen Jonker, Tjaart van der Walt, and Rolf Eichweberas launched the venture as a mobile money remittance operator. Thanks to financial support from MTN, TYME set out with the goal of empowering retailers through technology, allowing them to provide local remittance services at more affordable rates compared to traditional banks.

Fun fact: the company was known as Tymedigital until September 2018. TymeBank has emerged as a prominent South African digital-only bank. It holds the distinction of being the first black-controlled digital bank in South Africa to achieve profitability. This milestone positions TymeBank as one of the fastest-growing digital banks globally and marks it as the first African digital bank to reach such financial success.

TymeBank continues to be among the world’s fastest-growing digital banks, boasting an astonishing customer base of over 8.5 million. The bank stands out by offering a user-friendly experience with no monthly banking fees, ensuring a swift account opening process within five minutes. Also, transaction costs are consistently 30–50% lower than those imposed by other local banks.

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What Are TymeBank’s Notable Achievements Before Gaining Profitability?

TymeBank has attained some fascinating achievements in the digital banking sector before becoming profitable. Some of TymeBank’s achievements include:

  • In November 2012, TYME marked a significant achievement by establishing a crucial partnership with the South African Bank of Athens, now known as GroBank. 
  • TYME also secured Pick n Pay as a valued customer. This collaboration aimed to utilize mobile money for remittance purposes within South Africa, with Pick n Pay and Boxer Superstores playing pivotal roles in the implementation.
  • TymeBank took a major step in 2013, expanding its reach through a partnership with Ebank to create an affordable digital bank in Namibia. Leveraging its expertise in building core banking systems, this initiative aimed to provide comprehensive financial services to the people of Namibia, ultimately resulting in the launch of the digital bank in 2014.
  • In January 2015, the Commonwealth Bank of Australia (Commbank or CBA) acquired TymeBank for AU$40 million (approximately R365 million). Following this acquisition, TymeBank divested its 38.3% stake in Ebank to PointBreak, an investment company in Namibia. This strategic move marked a noteworthy development in the trajectory of TymeBank’s evolution.

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How Did This South African Digital Bank Attain This Huge Milestone?

TymeBank has achieved notable success in the digital banking sector, primarily due to two key factors:

  1. Innovative Banking Model:

TymeBank stands out with its distinctive banking model, marked by a seamless integration of digital channels and in-store kiosks within major retailers. This unique approach ensures accessibility and convenience for customers.

  1. Strategic Retail Presence:

The bank has strategically partnered with major retailers such as Pick n Pay, Boxer, and TFG stores, deploying over 1000 kiosks and establishing a presence at 15,000 retail points nationwide. This distribution network not only enhances accessibility but has also been pivotal in consistently attracting around 150,000 new customers each month.

As part of its broader strategy, Retail Capital, a division of TymeBank, has emerged as a leading SME funder in its sector, further contributing to the bank’s overall success. This integrated and customer-centric approach has solidified TymeBank’s position in the digital banking landscape.

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What’s Next for TymeBank as a Digital Banking System?

The Chairman and Co-founder of Tyme, Coenraad Jonker, further explained that the bank was not slowing down in their goals. He expressed optimism of TYME becoming one of the top three banks in the country. 

“ Our established track record of success positions us strongly to realize this bold goal in the coming years”

 ~ Coenraad Jonker

(Chairman and Co-founder of Tyme)

Frequently Asked Questions

How has TymeBank achieved profitability in just four years?

TymeBank’s profitability can be attributed to its innovative digital banking model. By leveraging technology and focusing on cost-efficient operations, TymeBank has managed to minimize overhead costs, streamline processes, and rapidly expand its customer base.

How has TymeBank addressed concerns about cybersecurity and data privacy?

TymeBank places a high priority on cybersecurity and data privacy. The bank employs advanced encryption techniques, multi-factor authentication, and continuous monitoring to ensure the security of its customers’ data. Compliance with regulatory standards is also a key aspect of TymeBank’s operations.

What impact does TymeBank’s profitability have on the South African banking landscape?

TymeBank’s profitability marks a significant milestone in the South African digital banking sector. It showcases the viability of digital banking models and encourages other financial institutions to explore innovative approaches to stay competitive and meet the evolving needs of consumers.

Conclusions

TymeBank’s achievement of profitability marks a significant milestone in the dynamic landscape of digital banking in South Africa. The four-year journey from inception to profitability reflects not only the resilience and adaptability of TymeBank but also underscores the growing acceptance and demand for digital banking services in the region.

References 

  • technext24.com– TymeBank hits profitability after 4 years, becoming first South African digital bank to do so
  • finextra.com– South African neobank TymeBank hits profitability
  • itweb.co.za– TymeBank swings into profitability in under five years

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Blessing Ukibe
Blessing Ukibe

Medical Student at Nnamdi Azikiwe University|Tech content expert at Silicon Africa Technology|Lover of fun books and fun fun ☺️

Articles: 90

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