TymeBank is one of the fastest-growing digital banks in the world.
They went from zero to four million customers in well under three years.
And they are now opening about 150,000 new accounts every month.
What makes this even more impressive is that they are not located in a fintech hotspot like the US or UK.
They are, in fact, in South Africa, which many would believe has a far smaller pool of potential clients and limited access to venture capital.
So how have they achieved this feat, and what can we all learn and apply from their approach?
I attempted to find out when I interviewed their CEO Tauriq Keraan, as part of the Huawei Future Of Finance Series.
Here are the six principles that I believe were foundational to their success.
And, with enough courage, you can use them all in your organisations.
1. Be Prepared To Pivot
TymeBank might only be approaching its third birthday, but Tauriq has been working on this initiative for a decade.
And that has meant he's pivoted multiple times.
What started in 2012 as a mobile money project involving Deloitte Consulting, MTN, and the Bank of Athens, was then acquired by Commonwealth Bank of Australia (CBA) in 2015.
The final pivot came when CBA sold their entire holding to African Rainbow Capital, and TymeBank was officially launched on 05th November 2018.
We've lived three lives Colin. We've lived a life as a FinTech that was founder-led. We've lived a life in this transition between FinTech and a fully regulated bank under the auspices of a large Banking Corporation. And now we live a life as a fully regulated, retail digital bank
Observation - Your first idea is unlikely to be the one that works. So please don't get so attached to it that it precludes you from pivoting to find that elusive market fit.
Twitter (podcasts to microblogging), Airbnb (inflatable mattresses to room renting) and Pinterest (online shopping to collection building) are just three examples of what can happen if you are willing to pivot.
2. Be Purpose-Led
One of the first questions I ask any successful CEO is how important purpose has been in driving that success.
Tauriq brought up the topic before I could even ask the question.
The first lesson is the power of purpose, and what purpose can do particularly in the darkest times .
One often gets the perception that the road to success is linear, but it's not. It's an incredibly winding road. But having the conviction in the vision is important.
You might want to get to Bloemfontein, but you might have to stop over at Kuruman and Kakamas for some tyres first.
I then asked what TymeBank's purpose was and how important that has been to secure support from their principal investor, African Rainbow Capital?
On the face of it is we are building a new challenger bank, to disrupt other banks and become a profitable thriving enterprise. But that's really the outcome.
The purpose of TymeBank is to bring about systemic reform to the banking sector.
South Africans have unbelievable human potential, but just don't have the opportunity.
People are not looking to be saved.
They don't want to be saved.
How dare we think that we are here to save people, right?
We are here to provide tools and to provide opportunities for people to flourish.
And in South Africa you've got a particularly challenging situation.
It's a dichotomy between those who have affordable and dignified access to financial services and those that don't.
And I'm not talking around class lines. I'm not talking about social democraphics.
There are people across these lines, that for example, are unhappy with the services, so you will see in South Africa, a banking sector that is notorious for having incredibly low net promoter scores which to my view is the ultimate measure of satisfaction.
So really, the purpose was around bringing about this reform.
Observation - The volume of evidence continues to mount that purpose-led organisations outperform their solely profit-driven peers. Discovery Insure (helping people live longer and healthier lives), Google (organising the world's information), and Tesla (making sustainable transport commonplace) are three examples of purposeful organisations that have obliterated their profit-driven competition.
3. Set Purposeful Success Measures
When I talk with CEO's about purpose, many will say they are purpose-led, but few back up the words with action.
The easiest way to determine whether an organisation is genuinely purpose-driven is to look at what measures they use to gauge success and incentivise their teams.
So, the important thing to realize, and I think you made this point Colin, is that you have very specific purpose metics, that are actually lead indicators of profitability.
So we measure at both of those levels, and we are held accountable at both of those levels.
What is revealed is a very explicit and intrinsic understanding that trying to maximize short term gains at the expense of long term, sustainable impact and therefore profitability, is not acceptable.
So I never see impact, divorced from commercial outcomes. I think the two things are inextricably linked. The one thing leads to the other and they have to coexist.
You know, if you cannot be commercially strong, there's no way you're going to have a sustainable impact. If you can’t make a sustainable impact to the lives of others, there's no way you are going to be commercially sustainably viable as well.
Observation - To lead with purpose requires purposeful metrics. For example, Zappos, an American online shoe retailer, aims to live and deliver 'wow', not sell shoes quickly and efficiently. Therefore rather than minimising average call times, they look to measure whether their agents develop a personal emotional connection and how well they kept the rapport going. The longest recorded call was 8 hours (the agent helped the customer find a pair of shoes from a competitor), and this was seen as a success!
4. Build Mutually Beneficial Partnerships
When it comes to scaling, nothing is more important than developing mutually beneficial partnerships.
Oddly, developing partnerships is where some of the large incumbents seem to struggle most.
I would argue that whilst many factors have helped make TymeBank one of the most loved banks, it's their partnerships that have helped it scale at unprecedented rates.
We talked in-depth about their partnership with Picknpay during the call, but the summary is simple.
Placing TymeBanks kiosks in Picknpay provides automatic distribution for the bank to millions of Picknpay customers on a daily basis.
Picknpay, of course also benefits, by using TymeBank to generate distribution for their smart shopper cards and saving money on physical cash handling.
Although this is perhaps the most important lesson I took away, I'm writing the least on it as I'd recommend you listen to the conversation.
Just click here or 👇 to watch that section!
You'll also get to find out why they took the interesting step of publically partnering with a faith group called the Zion Christian Church!
Observation - Partnering is critical to scale. It really is 1 + 1 =3. For me, Salesforce provides one of the best examples. Their early decision to create an ecosystem where companies could add their products and services to the Salesforce force.com platform was absolute genius. Rather than mentioning Amazon as a second example, how about GoPro & Red Bull,
Uber & Spotify or Apple & MasterCard?
5. Narrow Your Focus
The more niche you are, the easier it is to develop products and services that appeal to your target audience.
Imagine, for example, if you were an online shoe retailer that decided to only service men with size 10 feet and a neutral gait.
The theory goes that you'd be able to perfect your offering and your marketing to a level that no other online shoe retailer could compete with.
At least for the thin slice of men, with size 10 feet and a neutral gait.
My sense on the call was that, although TymeBank is not that extreme, they have succeeded by making sure they only focus on a slice of the potential banking opportunities that exist.
Specifically, Tauriq said:
We will not consider a market that does not have a progressive regulatory regime, particularly when it comes to two things.
One is digital ID verification of customers. If anyone requires a weird signature or piece of paper in that value chain, that's an immediate stumbling block for us.
But the second very important consideration here is cloud and the regulator's attitude towards hosting banks in cloud particularly around data integrity, data sovereignty and so on.
Taking calls like this is perhaps easier for a digitally-native fintech that is still focused and lean, than a ten year plus incumbent that's made calls over the years to develop every conceivable product, for every conceivable customer using every conceivable channel.
Which is what perhaps makes the lesson even more important.
Observation - Taking a narrow, focused path is a massive competitive advantage, and once you've lost that advantage, it's challenging to get it back. Companies that have hyper-scaled by perfecting their core offering include - Wise (now Transferwise), Zoom (video conferencing), or Spotify (music). I wish Wise offered a full banking service, Zoom provided online collaboration tools, and Spotify offered films as I love each of their offerings. The reality is that I'd probably love them less if they tried, as it's not an offering that aligns with their purpose and core skills. Well done to them all for sticking to their knitting!
A final example of a company that's refound its core offering is Pepsi Co. They rolled back their acquisitions of fast food chains like Kentucky Fried Chicken to refocus on what they are great at. Organising the manufacture and distribution of packaged foods and drinks on a global basis.
6. Decide Fast. Act Fast.
During the call, Tauriq gave several examples of products and services that had faced major challenges post-release.
I wondered whether part of their exponential growth was down to their ability to decide fast and act faster.
I also wondered how that tied up to concerns about a bank's various risks, regulatory and reputational being top of the list.
An entrepreneur is ultimately someone who assesses risk and takes a risk-based decision.
An entrepreneur is not a swashbuckling chevalier that is irresponsible, in how they behave, so so risk-taking and risk assessment is absolutely crucial.
But over and above that, you actually need the capability, right?
So you actually need the technology and data stack [as well].
I'm really proud of what we developed because it's something that's scalable, and easily configurable.
So you actually need the technology, the data and the culture.
And you need a way of work, in order to operate that way. Because it's one thing getting customer feedback. It's quite another to be able to act on it quite rapidly
So we're not perfect, but I do think that the ability to move very quickly, to be responsive, to make decisions really quickly, is at the heart of what I would call our ability to compete with large incumbents that have been around for 20 to 180 years
Observation - Tauriq's comments resonated with me. From my interactions with hundreds of CEO's, time and again, you see those that achieve hyper-growth have this innate ability to decide fast and act faster.
Factors that appear to consistently create a culture that allows for these better, faster decisions include having a leadership team that is purposeful, curious and courageous. That opens the possibility for creating autonomous teams and encouraging rapid experimentation and prototyping.
When that is paired with a digitally native, cloud-enabled tech infrastructure, you have the tools for fast execution that any sizeable incumbent organisation can only dream off.
A Final Note
This was the last interview of 2021's Future Of Finance Series, sponsored by Huawei, South Africa.
I'm therefore genuinely grateful for their support 🙏.
You can learn more about the series by clicking here.
All of the interviews are also available as podcasts. You can find those by going to www.coliniles.com/podcasts or by clicking the below image.
If you'd like to connect, give feedback, or explore how we can collaborate, do comment back or mail me at firstname.lastname@example.org.
Until then, Stay safe,