MMDB 2024 Innovation & Entr... Tyme Bank. Digital Dis... X + Create All tools Edit Convert Sign e ΑΙ BOO 1,534 Sign in Find text or tools Q TymeBank: Digital Disruption in South Africa's Banking Sector They approached Deloitte Consulting South Africa with the idea of building a new, truly inclusive bank, one that could be adapted for other emerging markets. In September 2011, Jonker joined Deloitte Consulting as a partner and Van der Walt as an independent consultant. They built up a team of financial technology specialists (including Keraan) and began work on a consulting project for mobile phone operator MTN to relaunch its Mobile Money product – a money transfer service – in South Africa. The origins of TymeBank were laid in this Deloitte Consulting project. ¹4 Shortly before the launch in June 2012, the discovery that Deloitte was the auditor of the Bank of Athens' parent company in Greece, highlighted a potential conflict of interest that threatened to derail the project. When MTN declined the offer to bring the project team of 17 specialists in-house, the team negotiated a full project spin-off with Deloitte Consulting and MTN. Along with the team members, all intellectual property was transferred to a new entity, which became Tyme Capital - Tyme being the acronym of Take Your Money Everywhere. MTN became a client of Tyme Capital. Jonker and Van der Walt, together with a number of the other founding team members, were still involved with TymeBank in 2019.15 The success of Mobile Money relied on partnerships with the food retailer Pick n Pay to allow cash deposits and withdrawals at Pick n Pay and Boxer's tills, and the South African Bank of Athens for the bank licence and other regulatory requirements. When Mobile Money relaunched in 2012, it allowed MTN customers to send, receive, deposit and withdraw money from Pick n Pay and Boxer stores, as well as make payments, and purchase pre-paid electricity and airtime. Customers were also able to swipe their Mobile Money cards at any point of sale card device and to withdraw cash from any ATM throughout the country. MTN's initiative was very successful: it opened more than one million accounts, and processed more than R1 billion in transactions in the first nine months of operations. Two years later, almost two million customers had used Mobile Money. 17 16 18 19 During 2014, the international financial services division of the Commonwealth Bank of Australia Limited (CBA), became interested in Tyme Capital because its banking technology was tailored to suit emerging markets, and CBA was interested in expanding its operations in Africa and Asia. In January 2015, CBA acquired 100% of Tyme Capital for a reported AU$40 million (R365 million), taking over its 80 employees and forming the Commonwealth Bank South Africa (CBSA).2 20 Keraan recalled: "We've always had the ambition to become a full-service bank, because we felt that only by being a proper deposit-taking and lending institution, could we make an impact on the financial empowerment of individuals and small businesses in South Africa.”21 CBSA believed that the time was right for a proper digital bank in South Africa, and in October 2015, CBA applied to the SARB for a bank operation licence for CBSA.22 This licence was only awarded in May 2017 and in the interim, in September 2016, MTN decided to terminate its contract with Tyme Capital, citing "lack of commercial viability” as the reason. At the time, Tyme Capital provided services to about 140 000 customers of MTN's Mobile Money. 24 However, Pick n Pay remained a client of Tyme Capital and Tyme Capital continued operating Money Transfer - attracting almost 210 000 new Money Transfer clients by October 2017. After receiving its licence, CBSA started trading as TymeDigital by CBSA (TymeDigital).26 The new bank aimed to be fully operational by March 2018.27 Ownership Changes 23 In early 2018, the investment holding company African Rainbow Capital (ARC) acquired a 10% share in TymeDigital.28 A series of events led CBA to change its strategy and focus on its operations in Australia and New Zealand. Thus, CBA decided to sell TymeDigital and ARC, in November 2019, 3 25 < > C 1:1 0 JUN 2 14 Between 2017 and 2018, CBA came under scrutiny for deficiencies in its anti-money laundering counter-terrorism financing (AML/CTF) protocols. In response, CBA changed its board of directors and its management team, and with it, its strategy [Source: BusinessTech (2018) "Australia's Commonwealth Bank reviewing TymeDigital ownershin in SA· 2 C 1:1 Q BOO 1,534 JUN 2 14 2