TymeBank finds traction with ‘digital immigrants’
A fifth of digital bank's customers are older than 46
More than 80,000 people have opened accounts with TymeBank since the launch of South Africa’s first fully digital bank almost four months ago, and nearly 20% of them are older than 46.
More than 80,000 people have opened accounts with TymeBank since the launch of South Africa’s first fully digital bank almost four months ago. And nearly 20% of them are older than 46, according to data released by the bank today.
Cheslyn Jacobs, the bank’s head of sales and service at TymeBank, says the bank has been surprised that a relatively high 19% of customers are aged 46 to 65. “The youngest in that age bracket would have been in a relationship with a bank for the past two decades,” he says. Such customers are considered less comfortable with technology as they are “digital immigrants” who were not born into a tech-saturated world. Their younger counterparts, the so-called “digital natives”, are much more comfortable with technology.
Jacobs says the bank’s ability to attract a high number of older customers shows how easy it is to open an account with TymeBank and the willingness of consumers “to engage a kiosk” which they need to do to get their bank cards, since the bank has no branch network and no ATMs. Customers can withdraw and deposit cash from more than 10,000 Pick n Pay and Boxer outlets countrywide.
There are 579 TymeBank kiosks inside Pick n Pay and Boxer stores countrywide, and the bank plans to have more than 700 by the end of April, Jacobs says.
At a kiosk you can open an account in five minutes and get a customised card. The bank uses biometric data from the Department of Home Affairs to verify your identity.
The average monthly fees incurred by customers is R10.Cheslyn Jacobs, the head of sales and service at TymeBank
Most of the bank’s customers (37%) are situated in Gauteng, 15% are in KwaZulu-Natal and 10% are in the Western Cape. This mirrors the footprint of Pick n Pay and Boxer, Jacobs says. While only 18% of customers registered online, he says the bank expects this number to grow steadily over time.
Only 30% of people who have opened accounts are using them, and the bank can’t say yet how many customers are using the account as their primary bank account.
The average monthly fees incurred by customers is R10, Jacobs says. “This drops to R7.50 when you take account of interest paid on savings, which will increase over time.”
Jacobs says this is 50% cheaper than the current winner in the Solidarity Bank Charges Report, a popular survey comparing the cost of personal transactional accounts offered by six South African banks. Solidarity’s comparisons are based on pre-determined user profiles with a set number of transactions in a month rather than the income of the user.
Tyme customers have the option of adding up to 10 interest-bearing savings pockets to their accounts, at no cost. The bank calls them GoalSave pockets and pays interest of 6% a year for deposits held for up to 30 days, 7% a year for deposits held for 31 to 90 days, and 9% for deposits held for 91 days and longer.
Interest on the money in each GoalSave pocket is calculated daily, on the balance at the end of the day, and at the interest rate for that day. The daily interest builds up during the month and is added to the balance in the GoalSave account on the first day of the next month. Interest compounds monthly.
While you have instant access to the funds, you may not transact from your savings accounts by, for example, paying a beneficiary out of your savings account. Instead, you have to transfer all of the money in the savings pocket to your transactional account – you can’t make piecemeal withdrawals – and start saving again from scratch.
Jacobs says the bank’s “big job” is to build trust, and the most frequently asked question of its “ambassadors” (who man the kiosks) is: where do I go when the proverbial pawpaw hits the fan? People want the comfort of a physical branch when technology fails them.
He uses the example of typical airline passenger who has booked and paid for their flight online and yet avoids the self-service check-in kiosk because they would rather deal with a person.