TymeBank will hit five million customers by June, its financial year-end. 

While this is a happy milestone, bottom-line performance is what drives profitability and leads to a superior return on equity. The young bank is “roughly on target”, with break-even anticipated in 2023, but the management team is not coasting – not by a long shot. 

This is what is behind the management shuffle, announced recently.

Having the right person in the right job at the right time for the business is essential, says Coen Jonker, co-founder and soon-to-be CEO of the South African bank. 

“We feel, culturally, strongly about playing every member of the team to their strengths, for the particular phase the business is in.”

For this reason, TymeBank CEO Tauriq Keeran will be redeployed to oversee international expansion. 

“He is our most experienced build-and-launch guy – he led the build process in South Africa and we want him to do the same for our third bank, which might be Pakistan.”

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Tyme is one of 20 banking institutions shortlisted for five digital licences in Pakistan. 

“It looks promising,” Jonker says. Unlike its South African banking licence, which is a full bank licence, Pakistan will issue digital banking licences that have less onerous capital adequacy and regulatory requirements. 

Tyme is one of six companies to have been awarded a similar licence in the Philippines, where development work is well under way, with “switch-on” scheduled for August and “go-live” for September.

Tyme’s vision is to build a digital bank serving underserviced communities, consumers and small business proprietors around the world. 

The markets that are most exciting are not those in sub-Saharan Africa, as one might imagine, but middle-income countries that look like South Africa. In particular, the group is excited by opportunities in Southeast Asia, and for this reason has its headquarters in Singapore. 

However, the team is systematic in its thinking, and right now the number-one priority is profitability in South Africa. 

“It’s like a relay race, and Tauriq will now hand the baton to me,” he says. 

While much heavy lifting has been done – getting the bank integrated into South Africa’s massively complicated payment system is virtually complete – there are a few strategically important steps remaining. These include bolstering the senior leadership team for growth, and adding partnerships that support business expansion. 

Partnerships are key in a business model that aims to provide banking services that are “an order of magnitude” cheaper and simpler than its competitors. 

“It won’t take an oil tanker to beat the legacy banks, but a fleet of speed boats. I will coordinate and align the speed boats,” Jonker says. 

As CEO of the South African operation, Jonker is responsible for not only partnerships, but acquisitions too. Possible acquisitions include winning fintech companies that would benefit from Tyme’s lower cost of funding and distribution. 

For most fintechs, this is their Achilles heel when it comes to competing with the banks.

This is not to suggest that Tyme is relying on buying-in its tech talent. The group has a team of 300 engineers and software developers in Vietnam and believes its “secret weapon” – or “superpower” – is the speed at which it can respond to market needs. 

“The pace of change is a differentiator for new entrants. In the longer term, the success of a bank is about how fast you can evolve,” he says.

The group’s majority shareholder, Africa Rainbow Capital, supported the idea that Jonker should move back from Singapore to take the levers locally. 

“Building a bank is a capital-intensive process and we, and our shareholders, are a lot less patient than shareholders with deep pockets might be in developed markets. I will drive those things to conclusion,” he says. 

Dave Pfaff, Tyme Group’s current CFO, will move to Singapore and take over from Jonker as Tyme Group CEO. He will drive the company’s expansion internationally, and in the fourth quarter will start to gear up for its Series C capital raise.  

Starting a new bank is both brutal and brutally complex. 

“Almost nothing went to plan,” Jonker says. 

Unfortunate timing saw the bank launched during a once-in-a-century pandemic, during which capital markets virtually dried up. Those difficulties seem largely in the past and the bank now has the capital necessary to see it through to profitability. 

It recently raised $180-million in Series B funding from Apis Partners, as well as its partners in the Philippines, the Gokongwei family, and more recently from Tencent and UK development finance institution, the CDC Group. 

This will be used to drive the South African bank to profitability and see the Philippines operation to launch. If successful in its Pakistan licence application, the next round of funding will support development in that market – a market of 400 million people – as well as providing growth funding in the Philippines. 

There are two “growth” models digital banks are following, explains Jonker. 

These are “fast and shallow”, like the UK’s Revolut Bank which provides international money transfers, or “slow and deep” like Brazil’s New Bank, which has entered just three countries, Brazil, Mexico and Columbia, in eight years. 

Tyme is following the second route. This requires discipline, Jonker says. 

There are other opportunities in South East Asia where governments are exploring digital banking licences. 

“Our challenge is not to take on too much. Otherwise you risk losing focus and putting the business at risk. So, we will enter new markets sequentially, one every 12 to 18 months.

“Building a bank that people trust takes time.” BM/DM

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