Online-Only Bank License in Nigeria

#1 · November 25, 2017, 11:43 PM

TYMEDigital got its banking license in South Africa few weeks ago. It is an interesting bank because it will be completely digital, no branch.

This could be one of those things that will work in South Africa but fails in any other place in sub-Saharan Africa. TYMEDigital looks interesting. It reminds me of Zhong An, China's online-only insurer which has found success in the market.

CBA bought Tyme (Take your money everywhere), a South African fintech business, in 2015.

TymeDigital uses cutting edge technology at its self-service kiosks to enable authentication of an individual, verification of address details which then allows them to transfer money, easily and within minutes.

CBA is now building a full service digital bank in South Africa, TymeDigital by CBSA. It aims to provide affordable and accessible banking services through a growing network of partners. Increasing awareness about financial services and their responsible use through financial education is an essential part of its plans to grow the market in South Africa and win customers.

TymeDigital is a non-guaranteed subsidiary of the Commonwealth Bank of Australia, one of the top global banks. In South Africa, African Rainbow Capital (ARC), an empowerment investment company, has a 10% shareholding in the bank.

This differs from Nigeria's SunTrust which indeed has branches in at least four locations. That takes me to ask: when will Nigeria begin to issue online-only bank license?

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#2 · November 26, 2017, 5:28 AM

Maybe when CAC and other entities, including banks stop demanding 'NEPA BILL' as a form of physical address authentication. That feeling of anything wholly online could vanish anytime is still there, until we take care of that.

#3 · November 26, 2017, 8:11 AM

Good point Francis. I do agree that we may need to have a way to authenticate and validate people electronically without a need of physical documents before this can work in Nigeria.

#4 · November 27, 2017, 2:30 AM

Ndubisi, like you said in one of your posts lately, online only customer centric business model will not work in Nigeria. I don't think anything has changed. Most of your reasons then, suffice here.

#5 · November 27, 2017, 2:31 AM

Ndubisi, like you said in one of your posts lately, online only customer centric business model will not work in Nigeria. I don't think anything has changed. Most of your reasons then, suffice here.

#6 · November 27, 2017, 3:36 AM

I agree with all but does that mean that Nigeria government cannot plan ahead even though online customer base is not there in Nigeria. Government must open up call to give such license. If we make progress on it is irrelevant. Time for cbn to open process to give such license

#7 · November 27, 2017, 4:01 AM

Absolutely. While the market may not be obvious now. We can still have a framework on how that will happen. As I wrote on Piggybank few hours ago and also discussed on Paylater weeks ago, these are potential digital-only banks. A framework on what to expect from the Central Bank can help the next raise of capital for online-only fintechs in Nigeria

#8 · November 28, 2017, 3:01 AM

You can't blame our banks for demanding utility bills before opening an account, an average Nigeria has more than 3 addresses use for both official and unofficial issues. As a point to note, it is one of the reasons while loans rate are high because the risk is also very high and that makes it a straight line equation.Nigeria has a long way to go in the proper registration of its citizens utilizing digital tools or maybe the likes of Social Security Number and it will boast many Businesses and reduce one of the code challenges of online business which is TRUST.

#9 · November 28, 2017, 3:23 AM

I agree with you that Nigeria must build a solid foundation for citizen identification. Everything will go from there. This is government problem, not banks or companies

#10 · December 27, 2023, 3:29 PM

The concept of a fully digital bank with no branches is intriguing, and it will be interesting to see how it performs in the South African market. Appreciate the details about its self-service kiosks, authentication process, and the broader plans of Commonwealth Bank of Australia in building a full-service digital bank

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Online-Only Bank License in Nigeria

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