TymeBank CEO Tauriq Keraan’s journey from the Bo-Kaap to digital banking boss has not been a typical one. He spoke to Business Day about his personal journey into the corporate world and how TymeBank plans to shake up SA's banking landscape and expand into new markets like the Philippines.
Q: Tell us a bit about yourself and how you ultimately became CEO of one of the world’s fastest-growing digital banks?
A: My family was from the Bo-Kaap in Cape Town. Money was scarce, more so when my father was retrenched as I was completing high school, getting ready to go to university. Despite our financial difficulties, I managed to complete high school and go to the University of Cape Town. During my studies I found a scholarship programme that enabled me to convert my undergraduate chemistry degree to one in engineering; it also allowed me to complete my master’s degree in mechanical engineering.
I married young and although things were tough financially for our young family, I was determined to focus on my studies and use the opportunities presented to me to improve my circumstances. After spending four years in digital banking, I was involved in Tyme’s development since its inception in 2012, when I was part of a team working at Deloitte on a project that involved building a mobile banking service for a telco client. The project could no longer continue within Deloitte and a decision had to be made to either shut down the project or spin out the team as a stand-alone commercial business.
In July 2012, Tyme was launched as a neo-banking service, in partnership with the telco. In 2017, Tyme was granted a full banking licence, which was the first to be issued in SA since 1999. As deputy CEO, I was responsible for overseeing the bank build programme end-to-end, which culminated in the launch of TymeBank in February 2019. I was promoted to CEO of TymeBank later that year.
Q: TymeBank has grown its customer base rapidly, from about 100,000 in early 2019 soon after its launch to about 3.8-million. What strategy has underpinned this rapid growth?
A: We believe it is our hybrid distribution model and transparency around fees and interest earned that sets us apart, together with the high value-for-money offering.
A key ingredient of TymeBank’s success is our partnership with Pick n Pay and Boxer, two of SA’s most trusted retailers. Not only can consumers sign up at the kiosk fitted inside the store, they can also deposit or withdraw money at any of the more than 14,000 Pick n Pay and Boxer till points across the country.
As a digital bank, we are able to run a retail operation at a cost base that is significantly less than the large incumbent banks. We are also able to make use of customer data and fully digital processes to deliver better simplicity, transparency and convenience to customers.
Our success can also be attributed to the agility with which we are able to fix process inefficiencies as they come, in a cost-effective way as there are no legacy issues in our technology stack. We have done away with manual processes in the bank by leveraging robotic process automation and artificial intelligence. It is this agility of digital banks that ultimately allows us to compete head-on with the large traditional banks.
Q: Define your target market for us — what is the typical TymeBank customer profile?
A: We cater to ordinary South Africans across the economic spectrum — everyone from social grant recipients to the more affluent consumer. We tick all the boxes from a financial inclusion perspective, but the time is right for us to diversify our customer base by targeting the middle-income segment.
Q: TymeBank was originally viewed as a digital-only bank, but you’ve just announced a plan to roll out 600 “kiosks” at The Foschini Group (TFG) stores. Is this the precursor to a fledgling branch network?
A: To build and scale a retail banking service in an emerging economy such as SA, TymeBank made a conscious decision to use a hybrid model that leverages all the benefits of being a digital bank as well as the ability to sign up customers in the physical world without building bank branches. Our partnership with Pick n Pay has given us an in-store presence through our 700 kiosks at Pick n Pay and Boxer stores since our launch in February 2019.
Q: How did the TFG partnership come about and what is the rationale behind it?
A: We started discussing the partnership before the pandemic, so it has been in the making for some time, and both parties felt the time was right now. TymeBank’s offering will complement TFG’s own financial services business as well as their core retail business by serving an evolving customer need. TFG customers will have access to a differentiated banking proposition that will be integrated into their retail experience, while being able to benefit from a fully fledged transactional banking and savings offering; buy now, pay later; followed by responsible term loans, insurance and various value-added services.
Q: TymeBank recently announced that it had secured a digital banking licence in the Philippines and would be entering that market. Why the Philippines and not an African country like, say, Nigeria or Ethiopia?
A: In February this year, TymeBank and its sister company, Tyme, raised R1.6bn. One of the investors is JG Summit Holdings (JG Summit), a Philippines-based conglomerate that has a massive retail presence that includes 4,000 stores across the Philippines, so they already have the infrastructure for the multiple touch points that are at the heart of our hybrid model. Their intention has always been to roll out digital banking in their part of the world — it was just a question of finding the right partner. That aside, the Philippines has a distinct advantage in that its regulatory framework is similar to ours, so all the right ingredients are there.
Q: SA companies that have expanded offshore, far away from their home base in Africa, have largely done very poorly. Are you not concerned you may fall into the same trap?
A: SA companies that have chosen this route have had mixed results for different reasons. In our case, the Tyme group has had an international presence in some form right from the beginning in Vietnam, Australia, Hong Kong, Singapore. What is important is having a solid partner.
Q: Who do you see as your main competitor in the SA market? Is it one of the other digital-oriented upstarts like Bank Zero or Discovery Bank, or a larger player like Capitec?
A: Our primary competitors are the big banks. As far as other digital banks are concerned, Bank Zero’s revenue model is still unclear, while Discovery Bank caters to a niche market, so our value propositions are not comparable. As our product offering evolves over time, we are likely to assess competition at a product level.
Q: What’s your vision for TymeBank and where do you see it 10 years from now?
A: TymeBank is operating in a rapidly expanding segment which is set to reach $1.6-trillion by 2027 globally. Our short- to medium-term aspiration for the bank locally is for it to be among the top five retail banks in SA by the number of active customers and have the highest Net Promoter Score (NPS) — [which measures the willingness of customers to recommend a brand] — of any retail bank in the world. I would like the bank to deliver return on equity of more than 50% to our shareholders. I believe this is entirely possible as a digital bank that has good operating leverage.
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