Welcome to Breaking Banks, the number one global fintech radio show and podcast. I’m Brett King. And I’m Jason Henricks.

Every week since 2013, we explore the personalities, startups, innovators, and industry players driving disruption in financial services. From incumbents to unicorns and from cutting edge technology to the people using it to help create a more innovative, inclusive, and healthy financial future. I’m J.P. Nichols.

And this is Breaking Banks. Welcome to Breaking Banks. I’m your host, Brett King, and J.P. and I are in the studio today to talk about the big news, the breaking news, well, it sort of broke a week, last week, but I’m trying to second-guess.

Relatively breaking news. Yeah. Yeah, relatively breaking news.

That Revolutz has secured provisionally, at least, their UK banking license. Step one of a two-part process, is that how it works in the UK? Yeah, I think so. But, you know, I mean, they can now represent themselves as a bank, at least, you know, in the mix of things.

And that gives them the rights and obligations of a, you know, a chartered financial institution in the UK. Obviously, they’re already licensed in the EU, but this is seen as a more serious license and it also may help them with entry into other markets like the United States. Because a UK banking license is, I guess, is given more credence as a foreign banking license in the US.

Yeah, I don’t know if, I didn’t watch enough of the British office to know if there’s a comparable clip for David Brent, but in the US version of the office, there’s a meme of Michael Scott screaming, it’s happening, and they’re running out. That’s kind of the feeling that’s happening right now, right? A fintech challenger is officially licensed, becomes a, I guess, we can’t quite say incumbent, but a more of a symmetric competitor. Yeah, I mean, let’s look at the, let’s look at the numbers.

So, you know, they’ve got about 45 million customers right now. In terms of their last results, I’ll just bring them up while we’re talking about it. You know, their last results were revenues were $2.2 billion.

That’s June 2024, 45 million customers globally and profits of $545 million, which, you know, three years ago would have seemed almost unbelievable. The revenue, not necessarily, but the profitability, you know, how many banks were saying they’ll never be profitable? You know, the incumbents, certainly I heard that a lot, you know, particularly pre-COVID, obviously things have changed a little bit. And also the other thing, you know, to recognize is that with 45 million customers today, Revolut is bigger than HSBC’s retail practice.

HSBC is 38 million customers. And what’s the cost to acquire and serve those customers? Look, you know, like I think Revolut’s customer acquisition costs now are on the higher end. So NewBank is now at $7 per customer.

Revolut, I think, is in the $20 to $30 range. It may be as high as $50 for some of their acquisitions. Well, that’s still an order of magnitude less than the typical brick and mortar branch.

Right. So Chase is paying what the latest figures were $350 to $380 US, you know, for the same. But the other thing is that Revolut can do this at scale, right? And the fact that they are at 45 million customers, which makes them bigger than HSBC in terms of number of customers and bigger than many other banks in the region, you know, you have to say, what does this say about the way digital banking is reshaping market share? Because, you know, those 45 million customers, that business has come from someone.

You know, like you might argue with NewBank and WeBank, you could make a solid argument that, you know, WeBank in Shenzhen and NewBank in Latam is a lot of their customers are new customers because they’re first time users of banking services. In more developing markets. Right.

But you can’t make that argument of Revolut. They’re operating in mature markets and they’ve got a very specific strategy with that cheap overseas, you know, cross-border transfer stuff, a little bit of crypto. You know, and the cool factor, obviously, a better user experience.

But, you know, they’ve got real numbers there now. They’re profitable. If they follow the pattern of some of the other operators in the space, they’re probably going to be more efficient at managing risk, credit risk.

That’s what we see for NewBank and WeBank as examples or Alipay lending to SME businesses in China. You know, we see significant advantages in managing credit risk because of better data models and new tech. So I see this as just, you know, Simon Taylor, who comes on, you know, those guys just talk about 1% banking is 1% done.

Now they talk about 3% done, I think. But, you know, I would say that this is just more of this trend towards digitization of banking and financial services. But what do you think it means for the European market? First of all, then we can talk about, you know, outside of that.

Well, I’m no expert on the European market. But I think when you look at, as you’ve noted, those are, for the most part, fairly developed economies with well-established traditional incumbent banks. And in fact, in most cases, a handful.

And so when you have a disruptor like this of you’re really what’s an oligopoly and it’s an oligopoly in the U.S. as well, even though we still have 4,500 banks here, it’s really the top 10 that have the vast concentration of assets and deposits. That’s meaningful. That is real David and Goliath kind of things.

And you talked about scalability. You think about the infrastructure, the cost basis that they have today. What’s the incremental cost to add the next million customers, the next 10 million customers, the next 50 million customers? That’s the point, right? They can like they can not automate the machinery, but it’s much more scalable.

And this is the thing that we’re seeing. You look at NewBank in LATAM, 100 million customers, the largest bank outside of Asia Pacific now in terms of the number of customers. WeBank is the third largest bank, I think, in China now in terms of number of customers, getting close to half a billion customers there.

Now you’ve got Alipay and WeChat Pay and so forth in the market. So my bank is a competitor there as well. But my point is, you’ve got massive scale coming from these organizations.

And, you know, the argument used to be in those early days, well, the only reason they’re growing so rapidly is because they’re so small, but you can’t make those arguments any longer, right? They’re larger than some of the largest banks in the world and they’re still growing and that’s why they keep getting funded. Well, and look at it just even from a market cap now, it’s early and that could change, but $45 billion market cap that’s in the neighborhood of Capital One, you know, much higher price to earnings, price to revenue. So certainly reflects some optimism of the upside.

Maybe that’ll bear out. Maybe it won’t. The thing I know the least about is their balance sheet.

We can talk about the customer growth. We can talk about their income statement. I don’t know the ins and outs of their balance sheet.

And to your point, maybe they’re going to end up being better at risk management. It appears maybe they are so far, but that is what traditional banks live and die by, right? That if they get the lending piece wrong, nothing else matters because of the leverage nature of the balance sheet. Yeah.

I mean, I’m looking through the results from June. I’m not seeing the NPL ratios or anything like that immediately, but I’ll do some digging on that. I think that’s a fair point.

But I think also, you know, it is a modality shift that’s occurring because of the tech, right, and because of the experience expectations. But here’s a challenge to some of the traditional thinking. I mean, if you were to think about who are the most likely candidate banks to be able to really use artificial intelligence in the next generation of their product, then obviously these digital players would appear to have a significant advantage in deploying that type of technology.

And here’s the question for you. Is, you know, those traditional metrics that we used to talk about, ROE, you know, asset size, all of those things that are sort of the main ways we’ve thought of, you know, who are the biggest banks in the world, the most successful banks in the world. What’s asset size do to help you make the transition to becoming an AI-based bank? Yeah, nothing to perhaps it’s even a drag on that.

Yeah, I mean, you could spend more money potentially than Revolut, but then you’ve got a lot more complexity in the systems that you’re having to deal with. So this is really I’m wondering whether, you know, we can now say that NewBank and Revolut, we can say WeBank in Shenzhen, these are amongst the largest banks in the world and certainly the largest banks in their market. They’re showing, you know, continued growth.

Revolut at 45 million, they put on 12 million customers. Last year in one year, right, so they’ve essentially, you know, it’s not it’s you know, I mean, it’s a big growth, you know, in a single year, what’s the percentages? Yeah, exactly. Yeah.

So you look at that and say, look, if they can keep that going and they can make an entrance into the US market, you know, it’s a tougher market for them, obviously. But certainly there’s still growth opportunities for them in Europe, even opportunities for consolidation, maybe acquiring other banks, particularly if they IPO and they go down that route, you know, which looks like this is what they’re preparing for. It’s interesting.

I just think it means that, you know, I think in 10 years time, if you were to ask who’s going to be the biggest bank in Europe, then you are going to now have to put in the in the playing field, obviously, you’re going to have to include the likes of Revolut and Monzo and Starling, right? And N26 and, you know, Nubank could conceivably come to Europe, particularly in, you know, Latin, you know, like Spanish and Portuguese markets. Well, I was talking to some bankers this past week and we were debating some of these things and these were all US based. But what I said is, look, just directionally, do you think 10 years from now, the best, most thriving, most profitable banks, do they look more like a Revolut or do they look more like an HSBC? No, they definitely have to look more like a Revolut, right? They have to compete, right? And this is the one advantage you pointed out, is that scalability, you know, the scalability element where, you know, Revolut can scale that up and, you know, it’s costing them less to acquire, but it’s a machine now and it’s a digital machine.

So much lower friction, particularly for entrance in new markets and things like that, whereas traditional banks, you know, just even on the tech stack stuff, it’s going to be a nightmare to think about creating a new setup in a, you know, if you’ve got to link it back to existing core and things like that, you know, you just even your technical agility is going to be a question. So, yeah, there’s no question I think to them. And look at their marketing spend.

One of the things that’s been highly correlated to their growth is marketing spend. They’ve spent a lot and I think they’ve spent well. It appears to be pretty effective, kind of, you know, catchy advertising.

So if you don’t have that cost advantage, you can’t spend that kind of money to win in that arms race, right? There’s the digital arms race and the customer acquisition arms race. But one of the things that feeds that is the marketing. And so many banks, frankly, are not really very good at marketing.

So here’s another great stat from their results. 70 percent of new retail customers joined organically or referred by someone they know. Word of mouth growth complemented by further investment into marketing and sales resulted in Revolut Business onboarding 20,000 SMEs as well.

So, you know, it’s pretty, you know, I think those results speak for themselves. How far along do you think they are in their SME business? I don’t, they didn’t have the numbers there. My sense of it is that’s pretty early, right? They started at acquiring customers.

That’s another whole. Driver of growth and an area that, yeah, so they said their company is on track to surpass 50 million customers by end of financial year 2024. So that’s pretty impressive.

And you think about. We’ve talked about this a lot on the show and a lot of our recent guests on the fintech revolution for small business is several innings behind the consumer and the first movers there are going to be able to leverage again, not only the tech stacks, not only the acquisition costs, what they’ve learned in marketing and really being able to leapfrog and grow a lot faster. And for a lot of banks and particularly the smaller banks all around the world, certainly the community banks in the United States, that has been their last refuge while we’re going to really double down on the small business.

So one of the really interesting points, JP, you make about the whole SME business piece is we are now starting to see as I think a significant shift in your ability to automate, you know, business services for SMEs. And so, you know, a great illustration of that is Alipay using the mobile wallet feature attached to merchant activity on Alibaba to be able to nut out cash flow, right, and discern cash flow and be at a price in credit risk, you know, for those SMEs. And we’re talking about 50 million SMEs.

This is 40 percent of the SME lending market. Now, their NPL ratios are half of the biggest banks, ICBC, Bank of Communications, you know, Agricultural Bank and so forth in terms of lending to the SME segment. So this is a data business, right? Like their success at being able to manage risk and, you know, seamlessly onboard these SMEs on the Alibaba platform.

Yeah, you could argue it’s because the Alibaba platform is there and providing funding to grow business on those platforms is a smart deal. But they’ve got all that cash flow data so they can see the business in operation because they’re providing this platform. It gives them an enormous data advantage.

And so I think when you start thinking about some of the applications of this, you know, particularly Starling, you know, with their SME approach and so forth, you know, again, you can see a lot of scale there. And the commercial business, as you said, has been something that, you know, has protected incumbents to some extent, but I would argue that’s changing. I agree with all that.

And let’s go all the way back to where you started, which is providing new insights, new services, new products for that. Banking traditionally, you know, it goes back to Ted Leavitt and what he said in 1960 in his piece, Marketing Myopia, about the railroads, right? The problem is they view themselves to be in the railroad business, not the transportation business. And I think traditional banks view themselves to be in the banking business, not, you know, the financial lubrication business, as our CFO likes to put it.

However you want to phrase it, it’s something more than simply, you know, we gather deposits, hold that money for you, and then we lend it back out as a part of the business practice. There are things around, like Jason likes to call the edge of money, and those are the edges that are closest to the owners and the users of that money, where it means more than fungible dollars and cents. It actually represents, you know, assets or payroll or, you know, whatever it might be.

And being able to understand those jobs that businesses have to do, whether that’s, you know, receivables, whether it’s payroll, whether it’s just getting paid from their customers, there is a lot of opportunity to improve that. And that’s where we’ve seen a lot of growth in fintech. And when you think about those fintechs, maybe now starting to get licensed, it really opens up a whole new world.

Here’s the other question I have for you, Brett. Yeah, go ahead. Yeah, go ahead.

I have one for you too, but go ahead. If you’re a bank, one of the things you may have been saying over the last few years is, well, it’s unfair competition. They’re not licensed like we are.

So therefore, they’re not subject to the same, you know, prudential regulation. So this is similar to the question I was going to ask you. But so you’re on the point.

Yeah, is this good news or bad news? I know where you’re going with it. Well, no, no, no. So I’ll tell you my perspective on this, because I think you’ll find it interesting.

Again, you know, I’m going to bring the futurist lens to this, is that in 20 years, there will be no such thing as a difference between the charters and what a bank looks like. It will look a lot more like a revolute. It’ll probably be a lot more technology based because of the AI.

And that will be what we consider a bank. And we will have gone long away from the capital adequacy requirements and the branching requirements and those sort of things that make up traditional banking as an artifact in the charter or licensing regime. Because to be a good bank in that future, highly autonomous, smart economies of the future, you don’t need any of those old things that you talk about now as a level playing field, right? You know, what you need is you need the tech, you need the agility, you need the ability to craft highly personalized experiences for a customer of one based on rich data sources and so forth.

You need to be embedded in their world. You need to be automating large scale systems of transactions and so forth, particularly on the business side. All of those things we’re talking about, none of that is really connected to what you would call a traditional bank.

And so that’s what I think. I think when we think of a charter in the future, it’ll be a technology infrastructure as a core part of the economy. I don’t think we’ll think of it as a bank in the way we think about it today.

One area I might disagree with you on is capital adequacy, but that will depend on how much you’re leveraging your balance sheet as a bank because there are so many other functions. I mean, there’s still going to be regulatory requirements. There’s probably going to be new ones, right? Right, exactly.

Yeah, like, you know, you’re going to have AI regulation come in about what AI is allowed to do, just like you do with the SEC today in terms of a recommendation that an independent financial advisor or something is going to give you. We’re going to have same constraints on AI in terms of what they can do and so forth. There’s obviously going to be mechanisms in there for what happens if it goes wrong, you know, and things like that.

I think there’s going to be a lot of new… The speed at which bad things can happen has been accelerated. We saw in Silicon Valley Bank, we see it with, you know, some of the trouble going on in the… Deposits can move at the speed of the Internet. That’s right, and some of the third party technology.

So I think that the regulations will move to meet that as well. Well, maybe the regulators will have to become technology organizations so they can assess that the viability of the technology… Now I’m really questioning your abilities as a futurist. That might be a bridge too far.

Well, you know, think about it, you know, let’s just let’s just take AML, right? Anti-money laundering rules, and, you know, it costs billions of dollars globally for banks to be compliant with this. Surely that can be fixed by artificial intelligence. But that would require the supervisory and regulatory function to have AI component.

I don’t think you distribute it through every bank and make them. I think you need a broad sort of transactional AI overview. I think that’s like the way we think about network security or cyber security today for large networks.

I think that’s how we need to think about it. And not just AI, right? That we need to embrace a whole lot more technology and machine learning and data at scale. Identity reform is a big, big element of that.

You know, when we start talking about fraud stuff. Anyway, we could talk about this all day, but we got to wrap. But I just thought it’d be interesting for our listeners to sort of, you know, this conversation has been going on over the last couple of weeks now, and I thought we’d give our take on it.

And anything else to add before we go? No, more to follow. All right, great. You’re listening to Breaking Bank, so we’re just going to take a quick break and stay tuned for more goodness in the fintech world.

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Learn more at AlloyLabs.com. Alloy Labs, banking unbound. Welcome back to Breaking Banks. I’m your host, Brett King.

We had the opportunity to catch up with the founder of TimeBank, Kuhn Yonker. Welcome to Breaking Banks. Brett, so good to speak to you again.

Yeah, no, it’s good. We saw each other in London, you know, what is it, two months ago? And we caught up. But, you know, I guess, you know, even though you’re based obviously in South Africa and today you’re in Jo’burg, Johannesburg, coming to us from there, you know, time is now starting to expand.

And, you know, as a challenger on the African continent, not only are you the fastest growing and most successful challenger in the South African market, but, you know, also you have a digital approach, which is rather unique for challenger banks or NEOs, not only, you know, on the African continent where mobile money is hugely successful, but, you know, beyond where you are in places like the Philippines and Vietnam, which is a really interesting counterpoint to the success we see for Nubank and Revolut, you know, and Monzo and others, WeBank in Shenzhen, you know, who are growing, obviously, you know, all of the fastest growing banks in the world today are fintechs. So, you know, it’d be interesting to get into that. But before we start, you know, why don’t you start with the foundation story, how time came to be and, you know, give us a bit of, you know, history behind the formation of the bank.

Great, yes. For me, the time story started way back in 2000 when I was doing my MBA and I came across the work of two academics, CK Prahalad, who wrote a book, Fortune at the Base of the Pyramid, that was really around operating model innovation, and a Peruvian economist by the name of Hernando de Souta, who wrote a book, The Mystery of Capital. And I put two ideas together to come up with a theory of success in retail banking that says that if we could meaningfully change the operating model of banking, we could serve ten times the customers at a tenth of the cost of the old banks and at the same time, give them a better customer proposition, give them a better customer experience.

And it’s phenomenal to look at this 20 years later and to see it happening in real time under our noses. So that passion for financial inclusion, for democratizing access to banking is really sort of the origin of the bank. I did some form of financial inclusion work in big banks in Africa until 2011.

And in 2012, me and my co-founder, Charles van der Valk, took the big step to go out on our own. We did the first years as a banking as a service business, working with mobile operators and retailers. But our ambition has always been to start and run our own banks.

And that dream sort of came to fruition in February 2019, when we launched Time Bank in South Africa, which is now sort of five and a half years old with nine and a half million customers. In 2022, we launched Gotime Bank in the Philippines, which now has around three and a half million customers. So just short of 13 million customers all on the platform.

And we’ve just launched our first product in Vietnam as our third market. Awesome. You know, it seems counterintuitive, you know, during the pandemic to launch a bank.

But actually, you know, if we look at the success that Revolut and Monzo and others had, you know, many of these banks, New Bank, did pretty well during the pandemic as long as there was was funding. But, you know, tell me about going through that period in the early in early 2020 as the pandemic sort of hit, you know, how was it being in the inside of this where, you know, you were still a fledgling bank and how did you navigate that period? Brett, I’m actually having PTSD as you’re asking me the question. You know, as the as you know, as the first words of a Tale of Two Cities, it was the best of times.

It was the worst of times. On the on the one side, you can now still look at the graphs of customer adoption when you open, you know, our our our sort of financial history and you see this jump in customer adoption in March, April, May 2020. And those were the months in which South Africa went into hard lockdown.

And we had this massive surge in customer adoption that continued to accelerate. That was the one side of the story. The other side of the story is that we launched a personal loan product, which we accelerated in February of that year.

And by May of that year, we had 80 percent bad debts on the book. So it was it was great in terms of adoption, very tough in terms of building the lending side of the business and particularly tough for capital raising. But, you know, having survived it, I’d say two great things came out of it.

The one thing is that I think the business today is way leaner than it would have been from a cost efficiency perspective and from a from a from a culture of frugality perspective than we would have been if it wasn’t for those tough years in in in COVID. And the other thing is, I think that we’ve proved to ourselves that we can survive tough times and that we actually can thrive through tough times, you know. So what Nassim Nicolas Taleb refers to as an anti-fragile business, it feels to me that COVID taught us to build how to build an anti-fragile business.

Yeah, I mean, you know, I think there were some fundamental elements, the digital adoption and so forth. But, you know, let’s take a step back for those unfamiliar with the South African market. What’s the regulatory environment like for a challenger like yourselves? Yes, I would describe the South African regulator as progressive, but risk averse when it comes to granting new banking licences.

So South Africa doesn’t have a digital banking regime and is very strict on people attempting to do new bank like activities without a banking licence. So in South Africa, we run on a full commercial banking licence and need to comply fully with all requirements of full scale commercial banks. And we are one of only three banks since 2000 to have been granted banking licences in the market.

One way to think about the South African environment, it’s still an oligopoly dominated by five banks, now six banks, including us, who hold 97% of all primary accounts in the market. We own about 10% of that now. So very good profitability in banking and very sophisticated players with, I think, very good quality customer service generally from a commercial, traditional commercial bank perspective.

Yeah, because, you know, previously we have seen, for example, with M-PACE’s entry into South Africa and the deposit requirements being a lot tougher that, you know, it didn’t go as smoothly there, you know, that we saw with mobile money in Kenya, for example, or Nigeria, although Nigeria has a very similar deposit taking requirements to South Africa. But, you know, one of the things that we’ve seen, obviously, recently, we just saw the results of Revolut and Revolut had some phenomenal growth, you know, it was at 97% revenue growth year on year. We see Nubank with incredible growth, you know, now up to 105 million customers and their market cap is well ahead of Itao, the second largest bank in the region.

But, you know, one of the things that’s notable is you have bucked the trend a little bit in that you do have a digital model, you do have physical presence in the market in South Africa, and you’ve replicated that certainly in the Philippines where you’ve gone. But, you know, having run a challenger bank myself, I find this a little counterintuitive because, you know, the whole scalability element comes with digital onboarding and digital engagement models. So talk me through why, you know, is that a regulatory requirement or is this is this something that you feel is, you know, a differentiator in the market? Because your growth, you know, getting to 10% market share in just such a short time is phenomenal.

So where does where does that fit in the strategy? Brett, we can we can speak the whole hour just about that. And I would say the first thing I would say is that these models are very contextual. I don’t think I would ever try the model with moving to New York or with with with Revolut.

Interestingly, there might be an argument for the model in other emerging markets like Mexico, but maybe worth to just very briefly describe what we do and then. Yeah, please. Please.

Yeah. Yeah. So we actually have two deployments in the physical world.

The one is that we deploy digital kiosks that are largely used for customer onboarding and customer servicing in physical retail stores. So imagine clothing and apparel retailers, grocery retailers having these digital stand up kiosks in the store where you can open a bank account in three to five minutes and it issues you a physical debit card. And what we do is we employ field marketing agents in combination with these kiosks.

And their job is really to educate people about digital banking, show them how to open a bank account and help them with the first steps of adoption, which is download the app and go to the checkout counter to deposit physical cash notes or coins into your bank account. And that’s the second channel we have. So you can think about the kiosk as sort of replacing the sales and service function of a branch and the checkout counter replacing the cash management function, the telefunction of the branch for cash in and cash out.

And that second channel is actually well known in places like Africa and Southeast Asia where cash is still dominant. Now, this channel has proven to be a big winner for us on three fronts. The first is, and this is very counterintuitive, our cost of customer acquisition is actually brought down by this channel.

And the reason is that it’s a very cost effective channel that reduces the need for digital marketing to build trust with customers. So our CAC is around $4 to $4.50 across our markets, compared to that with NewBank at $7, Jargo at $6.50 and the US banks and the European banks much, much higher than that. So as far as we know, and Brett, you probably will know better, as far as we know, $4 is a world leading CAC.

And well, yeah, WeBank in Shenzhen is lower, but that’s sort of an exceptional market, you know. But yeah, in the West, certainly, yeah. So the first is very low cost.

The second is that it accelerates trust in the brand. And so by putting these kiosks in well-known retail stores, associating the brand with the loyalty brand and the retail brand of retailers has helped us accelerate our path to becoming a primary bank and to becoming trusted by customers. And then the third is that what we do is we integrate the banking proposition into the shopping proposition through integrating into loyalty, buy now, pay later and so on.

And that actually gives customers this very, I would say, seamless set of nudges or hooks to initially adopt the product to drive that initial use cases and adoption. And so it’s worked extremely well for us. I think that it is a very good model for segments of customers that aren’t sort of digitally native or are not early adopters, not comfortable with digital to get them on the digital journey.

And but what’s interesting is that a smaller and smaller percentage of our customers is coming to us through that channel. So in the early phases in South Africa, 85 percent of our customers have come to this channel, through this channel. In the Philippines now, only 55 percent of customers come through this channel.

So we are seeing this move towards more and more customers feeling comfortable adopting our proposition through an app download, a pure digital journey. And so increasingly what we see these kiosks as is more like brand building and education points rather than the only channel that will drive cost, customer adoption and scale. And so for ongoing engagement, do you see that that sort of improves that conversion through to digital and confidence in the digital channel? Undoubtedly so, and I think the key to that is not so much the kiosk as that first engagement with our brand ambassador, which is just creating that human assisted initial engagements that get customers on the digital path.

What we do do, though, is once the customer adopts the digital channel for one thing, we invest quite heavily in our recommendation engine to drive digital usage and we limit the after sale use of the kiosk to the minimum. So we don’t want the kiosk to become a dependency for the customer where they come back and do day to day engagement with the kiosks. So largely the kiosk is only used for customer onboarding, for card replacements and PIN resets.

And particularly in markets where plastic is still used, the kiosk has the added benefit of being a really low cost way to distribute debit and credit cards. That’s interesting. In the Philippines market, of course, we have PayMayer and Gcash, particularly for the remittance market.

People are very comfortable with mobile money transfer. And of course, on the African continent, we have MTN money and, you know, and Mpesa and others really, really getting some some traction there. So how do you envisage the whole mobile wallet space impacting, you know, time strategy over the next few years? You know, I am an avid reader of your predictions about what will happen to these things, and I’m pretty much coming out in the school to say that I don’t think for customers there’s fundamentally that much of a difference between a mobile wallet and a bank account and a crypto wallet and so on.

It’s a store of value. And therefore, one has to make sure that you’re able to compete head on with both the wallets and the more traditional bank accounts. We do think, though, that there is a brand positioning benefit in being a bank from the perspective of being able to call the bank, the trust that comes with that.

Obviously, obviously, the trust has to also be combined with a very robust systems and continuous uptime and so on. But we do see already, for instance, in the Philippines that through the fact that we’ve concentrated our efforts on 99.99% uptime, we’re already creating for ourselves a reputation as being a very robust store of value. And we think that there’s an opportunity for us to become the more natural candidate for people to pay their salaries and to use for larger payments and so on.

And then if you can add to that slightly more sophisticated savings propositions, you can add to that the lending propositions and so on. We still think that there’s a way in which to differentiate ourselves from that trust perspective, also from the perspective of being the guardian of the customer’s identity. And this is where the asks again help us, because in some markets, it’s the only place where we can actually collect the customer’s form factors, identity form factors, facial print, the fingerprint and so on.

And that puts us in a very strong position to become over the longer term, the entity or the company that validates the customer’s biometric identity. You know, we’ve also seen, you know, particularly with the mobile money stuff and what we’ve seen with the mobile wallet plays in China in particular, a lot of network effect, you know, for for, you know, particularly for family members and things like that. So talk to me about, you know, because your growth has been phenomenal, clearly, you know, with the market share you’ve got in South Africa.

And the other element I’m interested in is the contextual piece. Right. So, you know, particularly with the success we’ve seen for BNPL, you know, more recently, and the fact that you do already have some integration into sort of the retail sector, you know, you know, how do you see those two things, you know, or how are you playing them in terms of contributing to growth? Yes, you know, the interesting thing that we see is that if you can launch a product that the customer experiences as contextually integrated into their life, into the environment, it makes it just so much easier to land that first one or two or three use cases.

And for us in South Africa, BNPL is quite an important part of that story. It is not a big profit driver for us, but it is a very big driver of that first that first experience and opening the customer up to the idea that I can do both my savings and my borrowing in one place in this environment. And so, you know, again, our school is that we think that the long term game is not to be single use case players or limited use case players.

The long game for digital banks is to become full service retail banks and full service SME banks. And we play in both those segments, retail and SME. And it’s really the interplay of different products and over time becoming the one stop shop for customers, everyday banking needs where we think the game will be at over the longer term.

Having said that, I think one thing that we’ve learned the hard way, it’s better to do few things well than to do many things in a mediocre way. So we are patient in building out that full retail and SME value proposition over time. All right.

So the obvious question that sort of would come up in any conversation about building a bank today is the role that AI is going to play in time banks. So talk to me about, you know, where you’re investing in that and how that’s changing your strategy in terms of that sort of full service approach. Brett, it’s very intimidating to talk to you about this product, about this topic.

So I will stick to my knitting and share some of the more obvious use cases that we see. The approach we take is we’ve got sort of a long list of over 100 use cases for AI right now. We prioritize them in terms of ease of implementation and productivity uplift.

We think at this point, the job, the low hanging fruit is around productivity uplift and customer experience uplift. So I’ll give you maybe the example I’m most proud of is implementing a combination of different AI models in our social media team. A year back in South Africa, in terms of response rate on social media, we were the slowest in the market.

We have seven people in our team compared to over 100 people in the team and our most direct competitors. And we’ve done two simple things. We run AI to prioritize messaging, to figure out which messages are the most urgent to answer.

And then we do essentially a first response through AI. So we just get the first response done. So we turn our eight social media agents into editors rather than writers.

And we haven’t seen the industry results yet, but we think we’ve gone from the slowest to the fastest in nine months through that and not adding any social media agents. And I think there are dozens of use cases like that that are not rocket science that will impact. And whether it’s call center, whether it’s text, message responses and so on, all those areas are affected.

The other area where we already see very significant uplift is in the programming, in the coding area. We employ about 400 engineers and developers in Vietnam. We now have about 80 percent adoption of co-pilot type solutions in that environment.

And we see that the productivity uplift is around 40 percent at this point. And we can see that speeding up. So certainly in those two environments, I think it’s obvious that it’s already working.

What I’m really interested in is this question where we can develop from putting a bank in a person’s pocket to putting a personal banker or a private banker in a person’s pocket. And we might be closer to that than people think. Yeah, no, I agree.

I agree. So, you know, to wrap up, because we’re running short on time. But maybe tell us a little bit about where you’re at in your funding cycle and what your plans are for the rest of the year for TimeBank.

Yes, so we’re in the middle of our Series E capital raise. We’re raising about 200 million dollars now, if all goes well, before the end of the year. The job of that money is to get us the profitability in the Philippines and accelerate our growth in Vietnam and also fund the first step of our entry into Indonesia.

We’ve committed to our shareholders to being ready for an international listing, if all goes well, New York listing in 2028. So I think maybe another round of capital raise or another two rounds. And then if all goes well, we can be ready for public markets.

That’s fantastic. Well, I might have someone for you in Indonesia, actually. So let’s take that offline.

But for now, if people are interested in following the story of time or, you know, sort of reaching out to you or following your work with the bank, how would they do that? They’re welcome to connect on LinkedIn or jump onto our website. My details are on there and me and the team here are ready to connect where it makes sense. And what’s the URL for the website? Time.com, T-Y-M-E dot com.

Right. So that’s fantastic. Well, listen, it’s been great to have you on the show.

Please keep us informed of your progress. Already phenomenal progress, taking 10 percent market share in just the space of a few years. Now expanding offshore.

It’s really interesting. And, you know, I wish we had more time to talk about this, but maybe next time that you’ve chosen instead of expanding in the African continent, you’ve chosen to go to the Asian emerging markets. And certainly Vietnam, Indonesia, Philippines are all very exciting markets when it comes to this space and underrepresented in terms of challenger banks in those markets.

And yet very strong mobile money support and things like that there, you know, like where I’m in Thailand, you know, Prompey on the QR side, Vietnam with mobile money is going going big time in the Philippines. Of course, mobile remittance business. So all very interesting to have sort of digital digital action.

So a really, really interesting model and certainly challenges some of the concepts of how NEOs should be working in this space. So I applaud you for the success you have. Thank you, Bridget.

Keep us keep us in the loop, but that’s that’s great. So that’s the founder of TimeBank, well, the co-founder of TimeBank, Kern Yonker. If you want to check them out, go to www.tyme.com and check out what they’re doing outside of South Africa as well.

But really interesting progress there. That’s it for another week of the world’s number one fintech podcast and radio show Breaking Banks. This episode was produced by our U.S.-based production team, including producer Elisabeth Severins, audio engineer Kevin Hirsham, with social media support from Carlo Navarra and Sylvie Johnson.

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