Our Commitments – A TymeGlobal Perspective

Tyme stands for providing simple, efficient and responsible banking. We

work with our customers to unlock their potential through customer-focused,

straight-forward financial products. At Tyme, we are driven by the conviction

that broadening economic participation is the foundation for human growth.

Digital technologies today offer us the tools to rebuild banking for the under-

banked and under-served.

To make this happen, Tyme introduces our commitments to current and

future customers, investors, partners, and regulators to:

Our commitments, and how we execute

them day-to-day, are guided by high-level

beliefs about what a bank should look

like. Firstly, even as we embrace

digitalization, banking must be designed

to deliver value to customers by solving

real problems for the broadest segment

of people, where they live, work and

transact. It must meet the financial needs

of the hundreds of millions of unbanked

customers worldwide that continue to

operate in cash, that may be

underserved, and that may operate

outside formal structures.

1. Build and re-build your bank – over and over

2. Partner with best-in-class solutions

3. Design products and services to make banking simple, efficient, and

responsible

4. Bridge the gap with customers through digitally enabled distribution

5. Collaborate with ecosystem stakeholders to develop our regulations and

infrastructure

Our Commitments

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Our Commitment #1: Build and then re-build your bank – over and over

Having built digital banks in countries across Africa and Asia, we compare

building a bank to building a city. A well-designed city is resilient and

responsive to change, evolving as people and businesses change. The

same is true for banks.

Secondly, the next generation bank needs

to meet the needs of its customers,

extending well beyond money transfers

and airtime purchases. Banking must help

customers address liquidity gaps, plan for

a better future, manage income gaps in the

last week before a paycheck, and hedge

against common shocks. Thirdly, banks

still need a business model that can deliver

this value at scale in a profitable,

sustainable and socially responsible

way.

Our Commitments

After climbing a great hill,

one only finds that there are

more hills.

– Nelson Mandela

Thinking of bank management this

way leads us to some imperatives

for how we build our TymeBanks.

Below we highlight three:

Modularity in

the modern

tech stack

Proximity to

customers and

their evolving

need

Adaptability in

our business

and operating

model

1.1 1.2 1.3

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Modularity in the modern

tech stack:

Modularity means we can continue

to evolve, enhancing what we

deliver and how we deliver without

costly and disruptive technology

rebuilds. We don’t need to be the

best at everything – but it is crucial

that we are distinctive in being able

to plug-and-play the best-in-class,

highly specialized capabilities of

others in a seamless manner.

Proximity to customers and

their evolving needs:

There are many ways to do this but

our ability to ingest and analyze

large amounts of data in real time is

critical. We need to be able to

interpret our customers’ usage

behaviours and customer service

interactions. But the job doesn’t

stop there yet. These data insights

must be designed into the

continuous improvement of our

products and channels, and our

processes for doing this should be

second-nature to us.

Adaptability in our business

and operating model

We need to remain vigilant against

the threat of thinking in terms of

“legacy revenue streams” – a major

barrier to innovation in existing

banks. We have often found that

this leads incumbent institutions’ to

be unwilling (rather than unable) to

cannibalize existing revenue in

favour of consistently delivering fair

value to customers. Conscious of

this, Tyme has structured its

organization innovatively with the

right incentives – such that when

our costs or risks drop, we

proactively pass on value to

customers, consistently choosing

long term success over short term

profits.

1.1

1.2

1.3

3

The endless possibilities that new

technology brings can be

distracting. Remaining focused on

delivering against your strategic

priorities is critical and solving one

problem very well has been the

success of fintech.

But as a digital bank with the

ambition to compete with the more

established players to meet the full

financial needs of the mass market,

a more holistic proposition is

required. To do this, partnering with

the best solutions out there is the

way we ‘build’ our bank.

Our goal is a curated platform

offering best-of-breed services to

our customers in areas beyond our

core capabilities. This is done by

partnering with carefully selected

partners with aligned incentives to

complement our core product set,

such as our successful partnerships

with AWS and Mambu, and joining

initiatives such as the Asean

Financial Innovation Network

(AFIN) APIX platform to rapidly

discover the best-in-class players

globally. Getting this right will boost

our ability to respond innovatively to

customer needs with enhanced

products, shorter time-to-market,

and lower costs.

Our Commitment #2:Partner with openness, technology and humility

People who are truly strong

lift others up. People who are

truly powerful bring others

together.

– Michelle Obama

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Customers are often either

excluded from formal credit markets

or have access to credit at prices

that will eventually cause them to

default. In the absence of an

understanding of customers, banks

and other lenders either charge

usurious rates to account for often

misunderstood risk, don’t lend to

customers they should have, or

push credit to customers that don’t

need it.

Tyme has a different approach. We

create one product for each product

line - a savings account and daily

transactions with no fees, a loan

product that is easy to understand

with no hidden payments – and we

give our customers their credit

score for free through our financial

literacy solution. We use data to

better educate our customers first

and then second, to help us better

design products for them.

Both data analytics and artificial

intelligence allow financial service

providers to better understand risk

at a customer level, and extend

credit to more individuals and

businesses, at lower prices.

However, there is a gap in the

market between fintechs that are

good at ingesting and analyzing

alternative datasets, and more

traditional bank credit departments

that understand market risks,

economic cycles, broader

macroeconomic data and have

access to traditional transaction

data.

Tyme positions ourselves at the

intersection of these worlds, with

deep data analytics and artificial

intelligence capabilities, access to

traditional and alternative datasets,

and decisioning that is grounded in

economic analysis and

understanding – while operating

responsibly as a fully regulated

banking institution. If you want to build a ship, don’t

drum up the men to gather wood,

divide the work, and give orders.

Instead, teach them to yearn for the

vast and endless sea.

– Antoine de Saint-Exupéry

Our Commitment #3: Design products and services to make banking simple, efficient, and

responsible

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In South Africa, Tyme achieves

this by utilizing a broad array of

data, such as retail basket level

data that it has exclusive access

to through its partners,

unsummarised municipal and

bureau data, mobile data, in

addition to the Bank’s account-

level transaction data. This

enables us to price our loans cost-

effectively and on a true credit

risk-adjusted basis, in addition to

extending credit to ‘thin-file’

segments that incumbent banks

have traditional shied away from

in emerging markets. Coupled

with our financial literary app,

TymeCoach (Figure 1) we

gradually bring our customers into

a positive virtuous cycle of

building up creditworthiness,

educating and incentivizing them

on financially responsible

behavior.

Gamification has seen strong

traction among fintech solutions in

the developed markets. We

believe the concept has a useful

role to play in emerging markets

with the right behavioural nudges

designed for the emerging market

consumer. Our TymeBank

GoalSave product is an example

of such a product that incentivizes

savings. It provides nameable

savings pockets that have a

higher interest rate (up to 10%)

the longer customers keep their

money in the pocket, accrues

interest daily to help customers

enjoy the tangibility of saving, and

does not charge any penalties if

customers want to take their

money out – especially important

for those without the financial

buffer for unforeseen events in

life. This is TymeBank working to

develop positive financial habits.

TymeCoach gives customers

their credit score for free,

alerts them when it changes,

and provides educational

content on the basics of

credit, how to improve your

credit score, and how to manage debt.

Figure 1:

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Phone-enabled agent networks that

extend well beyond any existing

distribution drive the success of

mobile money in Africa and

elsewhere. This highlights the

power of tech enabled high touch

approaches when expanding

financial access. Purely digital

banks, while a significant

improvement for customers from

the more traditional banks, are

simply not designed for the needs

of most emerging market

customers. At the same time, the

costs of branch-based traditional

business models simply do not

allow for outreach beyond higher

income, high density areas. For full

inclusion in emerging markets,

customers need the high-tech,

high-touch engagement that Tyme

offers its customers.

We believe in a world of high tech

enabling high touch. In South

Africa, Tyme welcomed 1,000,000

customers in ten months, a

record among greenfield digital

banks. We achieved this not just

from our mobile app but through the

combined effort of TymeKiosks,

Tyme Ambassadors and TymeCode

integrations into retail till points

(Figure 2) to bring the human touch

back to digital banking. Our

digitized distribution delivered a

better user experience and

functionality across a broader

footprint than our significantly larger

competitors from day one. And

South Africans responded positively

– we are now fastest growing

greenfield bank globally!

TymeBank currently signs up more

than 100,000 customers per

month.

Technology is only meaningful

when it reaches the people.

– Pranav Mistry

Our Commitment #4:Bridge the gap with customers through digitally enabled distribution

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TymeKiosk

▪ Open an account in 3-5 minutes

▪ No documentation required, only your fingerprint

▪ Receive a personalized Visa debit card on-the-spot

▪ Fully automated end-to-end, with no manual intervention

▪ Regulator-approved eKYCprocess

▪ Available throughout ~730 Pick

’n Pay and Boxer stores throughout South Africa

TymeCode

▪ Proprietary secure tokenisation application

▪ Easy integration into retailer point-of-sale systems

▪ Enables low-cost, real-time

cash deposit and withdrawal in

retail stores beyond banking

hours, at ~1,400 locations nationwide

TymeBank Ambassadors

▪ Young men and women

employed from the local communities

▪ Staffed next to the TymeKiosksto assist when needed

Figure 2:

Tyme’s digitized retail

distribution solution is high tech-high touch

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Despite our kiosks being designed

for user-friendliness, we

strategically chose to employ

TymeBank Ambassadors, young

men and women from the local

communities, to engage with early

adopters and repeat customers to

inspire trust in the TymeBank

account and solution.

With TymeCode in place, cash

deposits are our second most

popular transaction –

highlighting cash is still king in the

market . By integrating into the

retail environment, we have

gained our customers’ trust – our

active customers swipe on

average 7.5 times per month,

gaining loyalty points and helping

us understand their needs better.

Our approach works! First, in our

pilot test in Indonesia, we

opened 7x more accounts for

our partner bank there through the

TymeKiosk network than they had

done previously through its branch

network before the pilot. 98% of

all new accounts were opened

through the 150 kiosks network by

May 2019 (versus 2% through the

36-branch network), with a ~80%

reduction in the cost of customer

onboarding per account for the

bank.

In South Africa, for our own

TymeBank, the results have been

even more overwhelming. 84% of

TymeBank’s first 1 million

customers signed up through

the TymeKiosk (even though we

enable fully online onboarding).

Equally important, we have been

able to launch TymeKiosks

without losing the cost and

experience advantages of digital

banks. Our cost of acquisition is

80-90% cheaper than traditional

bank account opening processes,

and cheaper than our fully online

onboarding – notwithstanding our

Ambassadors.

Through our TymeKiosk,

TymeBank Ambassador, and

TymeCode, we have proven that a

digitized physical infrastructure in

the right location with the right

partner delivers the most cost-

efficient customer acquisition for

digital banks.

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Figure 3:

TymeBank South Africa’s onboarding points and deposit/withdrawal points compares favourably to the country’s big 5 banks

Our Commitment #5: Work with ecosystem stakeholders to collaboratively develop our

regulations and infrastructure

Customers and technology have

not been the only things to change

since we started on this journey. In

our early days, the opportunity for

regulatory dialogue and guidance

was limited.

Today, however, many regulators

around the world are taking a

more explicit innovation facilitation

role – especially when it comes to

innovation that has the potential to

drive competition and inclusion.

We welcome this development

and believe this enhanced level of

engagement is already showing

benefits for customers, providers

and regulators.

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One of the things we did …

was really making it as easy as

possible for those innovative

firms to come and talk to us, to

dock them with existing

regulation where we could, but

also being open and prepared

to say we would change how

we regulated if we did see

ideas that were in the interest

of consumers…

– Chris Woolard,

Executive Director of Strategy

and Competition at the FCA,

UK

We have successfully launched in

markets without some of the basic

building blocks, like an ID

database. But the outcome is

better for everyone when some key

foundational elements are in place.

Below we list a few of these:

i) Regulator willingness to allow

cloud competing which has the

potential to increase scalability,

security, agility and cost-efficiency

for financial service providers.

Tyme’s risk teams are as risk

adverse as any regulator we have

come across, but we have become

excellent at better managing risk

within this new realm of possibility.

By engaging openly with

regulators, we understand their

concerns, explain how we manage

against the related risks and agree

on ways of working that can give

them (and us) the desired level of

comfort, without losing the

momentous gains on offer.

ii) Query-able ID databases and

risk-based KYC regulations. We

have the technology to fully KYC

customers remotely in a matter of

minutes.

But this ability relies on risk-based

KYC regulations, the existence of a

national ID database, and an ability

to query that database in order to

run basic checks. We have

successfully worked with third

parties to get these queries down

from days to a matter of seconds –

but some basic infrastructure is still

required.

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iii) Access to data. Open banking

regimes are becoming increasingly

common, especially where

regulators are concerned with the

level of competition. In Mexico,

regulators are pushing for digital

payments over cash to advance

financial inclusion. In Australia,

regulators have signaled the

intention to progress the open data

regime beyond banking to include

telecoms and utility data.

Irrespective of whether these

moves come from industry or the

regulator, we welcome any change

that gives customers more control

over their data – whom it is shared

with and how it is used for their

benefit.

iv) Interoperability that lets

suitably qualified new players

seamlessly connect with existing

players and their customers.

Whenever regulators and industry

can work to enhance the value

from accounts and wallets,

especially relative to cash, the

better it is for everyone in the long

term. Real-time, low-value

interoperability is one way.

The core of our team has been

working on breaking down the

barriers to financial access in

various forms for over 15 years.

We’ve done this from inside one of

the largest banks in Africa, through

a founder-funded fintech, from a

development finance institution, as

a fully owned subsidiary of an even

larger bank, and most recently as a

fully licensed greenfield bank. We

have always had a healthy sense

of urgency and impatience which

has kept us moving fast –

designing, building and operating

these different business units,

fintechs and banks. This article is

our attempt to take a moment to

reflect on our vision and to share

some commitments we think are

key to achieving that.

There is a lot more that is required

to successfully achieve our vision.

We fully expect our views on these

to evolve as we continue to learn.

We welcome your views on these

and other critical capabilities we

may have missed. Share in the

comments below or contact us

at hello@tyme.com.

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