GoTyme Bank and Its Remarkable Journey Towards Profitability

GoTyme Bank and Its Remarkable Journey Towards Profitability

by February 14, 2024

GoTyme Bank stands out as a beacon of digital banking promise in the Philippines, less than two years after launch, in an era where fintech innovations are rapidly transforming the global banking landscape. The unique joint venture between Tyme Group, a Singapore-based digital banking group, and the Gokongwei Group, a prominent Philippine conglomerate, has captivated the market by amassing 2.3 million customers in just 14 months.

This achievement is paralleled by the remarkable success of Tyme Group’s flagship operation in South Africa, TymeBank, which has supposedly become the world’s fastest profitable standalone digital bank.

TymeBank’s rapid ascent in the industry is further highlighted by its classification as one of the world’s fastest-growing digital banks. Since its inception in February 2019, TymeBank has amassed a customer base of 8.5 million, coupled with a 30% growth in its SME lending portfolio in 2023 alone.

To put the achievement in perspective, most digital banks experience a vastly longer journey to profitability — if they become profitable at all, with less than 5% of digital banks worldwide managing to get out of the red. Notable profitable digital banks include Brazil’s Nubank, which took eight years, and the UK’s Monzo, requiring seven years to reach this milestone.

The strategic insights shared by Nate Clarke, President and CEO of GoTyme Bank and a founding member of Tyme Group, alongside Albert Tinio, Co-CEO at GoTyme Bank, provide for a better understanding of the innovation-driven approaches and philosophies driving this exceptional growth.

GoTyme Bank’s Strategic Foundations of Digital Banking Excellence

At the core of GoTyme Bank’s operational philosophy is a commitment to overcoming the quintessential challenges of digital banking: achieving affordable scale, accelerating trust among consumers, and adeptly navigating the complexities of emerging markets with often data-poor environments.

Nate Clarke

Nate Clarke

“Our approach is fundamentally different from traditional digital banking models,”

Nate explains.

“We prioritise not only technological innovation but also how this technology can be made accessible and trustworthy for a wide audience.”

The bank has adopted a “phygital” strategy, integrating digital banking services with a tangible physical presence within retail ecosystems to build trust and widen its reach. Nate highlights the effectiveness of this strategy, stating,

“Integrating into retail ecosystems has allowed us to turn retail stores into banking service points, effectively doubling our addressable market by appealing to those skeptical of purely digital solutions.”

The Tyme Group co-founder says that turning retail stores into physical touchpoints with either GoTyme or TymeBank kiosks in them was key, with around 1200 stores in South Africa and about 500 kiosks in the Philippines. This was a critical ingredient along with placing ‘ambassadors’ at each location to do sales, educate on the products, as well as facilitate account opening and issuance of personalised debit card in less than five minutes.

Gotyme Bank and Its Remarkable Journey as Part of Tyme Group and Gokongwei

Personalised debit cards can be issued at kiosks in a matter of minutes. Source: GoTyme

Accelerating Customer Acquisition and Fostering Trust

The innovative deployment of kiosks in strategic retail locations, providing instant account opening and debit card issuance services, underscores GoTyme Bank’s unique approach to customer acquisition. Albert elaborates on the importance of this strategy:

“Our kiosks, combined with the presence of our ambassadors, have significantly contributed to our rapid growth, making us appealing even to those hesitant about fully digital platforms.”

The role of community in GoTyme Bank’s strategy cannot be overstated. The bank fostered a community of early adopters even before its official launch, with two Facebook groups emerging early as a platform for engagement and feedback that has been instrumental in refining its offerings.

That community has since grown and grown and grown over the past year, something like 120,000 across both communities and more,”

exclaims Nate.

Gotyme Bank and Its Remarkable Journey as Part of Tyme Group and Gokongwei

A GoTyme ambassador assisting a customer at a kiosk in one of the 500+ locations in the Philippines. Source: GoTyme

Albert makes it clear how unlike other challenger banks, pursuing deposits and digital lending in a longer time frame, GoTyme Bank is very much the digital bank for every day transactions and banking needs.

Albert reflects on the power of this engagement,

“This community-driven approach has been pivotal in making banking relatable and practical, establishing a loyal and active customer base that feels a part of our evolution.”

Path to Profitability for GoTyme Bank

Nate and Albert draw inspiration from TymeBank’s success in South Africa, achieving profitability in an unprecedented timeframe. They are optimistic about replicating this achievement in the Philippines, but on an accelerated time frame, leveraging their strategic advantages such as shared technological infrastructure dramatically reducing the need to develop tech.

A crucial element of GoTyme Bank’s journey in the archipelago has been the strong brand presence and network of the Gokongwei Group, which the co-CEOs acknowledge have democratised access to other industries in the Philippines such as the airlines and food services sectors — and brought that same accessibility and brand trust to digital financial services, as well.

“By capitalising on our lower operating costs and the swift pace of customer acquisition, we aim to reach profitability within three years,”

Nate asserts, highlighting the bank’s efficient cost structure as a key factor in its ability to offer customer centric services, such as a 5% base interest rate on deposits, regardless of how much funds are put in and maintaining balances required to keep the account open.

Navigating the Regulatory Landscape

Albert Tinio

Albert Tinio

But perhaps even more integral was the progressive regulatory environment in the Philippines, facilitated by the forward-looking central bank, Bangko Sentral ng Pilipinas (BSP). Albert commends the BSP’s role, stating,

“The BSP’s forward-looking stance has been instrumental in allowing us to explore the boundaries of digital banking, fostering a regulatory dialogue that supports innovation.”

This partnership and collaborative working relationship between regulators and digital banks has been essential in addressing the unique challenges and opportunities presented by new banking models.

Expansion and Future Outlook for GoTyme Bank

With an eye on the future, GoTyme Bank parent Tyme Group is poised for further growth, planning to expand its product range and explore new markets. Nate reveals,

“Our next strategic move is to enter the Vietnamese market, replicating our successful model in another promising Southeast Asian country.”

This ambition underscores the bank’s commitment to redefining banking across the Southeast Asia region, and beyond.

The journey of GoTyme Bank is a testament to the transformative power of strategic innovation, community engagement, and collaborative regulation in the digital banking sector.

As both GoTyme Bank and the Tyme Group at large continue to expand and evolve, its story offers lessons for the future of banking in an increasingly digital world. With a focus on inclusivity, technological innovation, and customer-centricity, GoTyme Bank is on a path to becoming a dominant player in the Philippine digi-banking landscape, while Tyme Group redefines the standards of banking for millions globally.