Not even two years since it began operations, GoTyme has branded itself as the fastest-growing bank in the Philippines.

Every month, GoTyme onboards about 250,000 new customers. The digital bank hit its three-million customer milestone last April 20 and ranks as the most downloaded bank app.

But how exactly did this digital bank storm onto the scene? The story involves a daring South African fintech, a sprawling Philippine business empire, and a lot of supermarkets.

From South Africa to Southeast Asia

Like its name might suggest, GoTyme was born as a joint venture between Tyme Group and members of the Gokongwei Group – Robinsons Bank, Robinsons Land Corporation, and Robinsons Retail Holdings, Inc.

That means that at its core, the fast-growing Philippine digital bank traces its roots to South Africa, where Tyme Bank first established itself. There, Tyme built a “phygital” model using supermarkets, which were the dominant local remittance players in the country. Nathaniel Clarke, GoTyme president and chief executive officer (CEO), said the digital bank partnered with popular supermarket chain Pick n Pay to have their stores act like bank branches – a strategy that allowed Tyme to build a seven-million customer base in South Africa.

When Tyme began looking for places to expand to within Africa, it didn’t find many suitable countries. The group was looking for a country with a large population and consolidated retail companies, like supermarket or store chains. Clarke said that the only market in Africa that might have ticked those requirements was Egypt, but Tyme was “uncomfortable with the geopolitical situation there.”

So what region had big populations, young and fast-growing economies, and consolidated retail?

“Our expansion story is all focused on Southeast Asia. We think it’s better suited for our model, better demographics,” Clarke told Rappler.

The ‘Go’ in GoTyme

Enter GoTyme.

By partnering with the Gokongwei Group, which included thousands of Robinsons supermarket and department store branches, GoTyme could replicate the same “phygital” model that brought it so much success in South Africa.

“We met the Gokongwei family, and then we wanted to include the Gokongwei name in the branding to accelerate trust because obviously everyone knows and trusts Gokongwei,” Clarke told Rappler. “We just got lucky ‘GoTyme’ sounds so good.”

Albert Tinio, GoTyme’s co-CEO and chief commercial officer, also called the timing and result a “match made in heaven” as the Gokongwei Group was just embarking on its digital transformation initiative when Tyme Group approached them about the joint venture.

And that all happened with the looming uncertainties of the COVID-19 pandemic.

“We did due diligence online. We met online. We applied for our license online – everything. We even built the whole team online,” Tinio told Rappler.

As far as digital banks go, GoTyme is incredibly young. Lance Gokongwei, who serves as head of the family’s business empire, first met with Tyme only around four years ago in August 2020.

“It was literally Lance saying, ‘I want to build a digital bank,’ and then us saying, ‘We want to build a digital bank with a local partner who has a retail network.’ Perfect. It was a bit of serendipity there,” Clarke told Rappler.

Growth and future

A year later in 2021, GoTyme became one of six digital banks to get a license from the Bangko Sentral ng Pilipinas. It then launched in October 2022 and wrapped up its first full year of operations in 2023.

Based on the latest financial statements filed by Robinsons Retail Holdings, GoTyme finished 2023 with net losses of P2.47 billion. At first glance, this might look like the company was bleeding out, but it’s actually planned. It takes time for digital banks to turn a profit, especially with expensive infrastructure set up and marketing costs in the first few years.

“Most banks around the world take about, on average, seven years to break even. It took us five in South Africa. We think we can do it in three years – towards the end of next year,” Clarke told Rappler.

The GoTyme CEO also pointed to the case of Nubank, the largest digital bank in Latin America. Founded in 2014, the São Paulo-based fintech was in the red for nine long years – all while it expanded across Brazil, Mexico, and Colombia. And then Nubank finally hit profitability in 2023, with net income expected to reach $1 billion.

“We’re spending close to $1,500,000 a month just getting new customers. So that’s productive money spent. Almost a third of our total expense is actually onboarding,” Clarke added.

Digital banks have the edge of a much lower cost to acquire and cost to serve than traditional banks. In the case of GoTyme, Clarke said that he expects the bank to start breaking even once it hits a customer base of around eight million, which is when revenue growth will quickly outpace costs.

Using app downloads as its proxy measure for customer acquisition, GoTyme said it was already “the fastest growing bank,” be it digital or traditional. GoTyme estimated that with 250,000 new customers a month, it was growing about 2.5x as fast as its nearest digital bank competitor, Maya.

Besides deposit accounts, GoTyme is looking to soon roll out its “first foray into different investment products,” starting with three to six-month US dollar term deposits. This will gradually be expanded into other foreign currencies as well.

In the second half of 2024, Clarke also said that GoTyme will get into cryptocurrency and local equities trading, a segment that he believes is “hugely underserved.”

GoTyme also has a small business lending product launched with PayMongo and a pilot for earned wage access being rolled out among some companies in the Gokongwei Group. (READ: ‘Payday every day’ may become Shangri-La Group, BPOs’ secret to happy employees)

The digital bank also said that it doesn’t have a date yet for when it would launch its own credit card, but that it’s on the roadmap.

“We don’t have concrete plans. But listen, if we want to be the largest retail bank, obviously we need a credit card,” Clarke told Rappler. – Rappler.com