GOtyme, a partnership between the Gokongwei group and Singapore-based digital banking group Tyme, has been granted a digital banking license by the Bangko Sentral ng Pilipinas as it enters as the fifth neobank or digital-only bank in the Philippines.

This latest achievement will onboard GOtyme through an app and digital kiosks located throughout the mall and retail footprints of the Gokongwei group.

As banking is integral to the country’s economy and essential to our daily lives, it is not surprising that the country is experiencing a rise in neobank or digital banking. Legacy banks are rapidly upgrading their online offerings and, several digital-only banks are announcing their plans to enter the market.

The banking and financial industries are currently at the forefront of digital innovation. In the first month of the pandemic, the banking industry saw an increase in digital transactions, which it attributes to the shift to digital channels among banking customers due to social distancing measures that are in place to control the spread of COVID-19. With health experts expecting the pandemic to last until at least next year, digital transactions will continue to experience growth.

How to set up a digital bank?

Aside from hardware and software, a digital banking group company must possess three or more years of track record in operating an existing business in the technology or e-commerce field to secure license and operate as a digital bank. It also must have its substantial shareholders, directors, and executive officers of the proposed digital bank, when identified.

The company group must demonstrate the ability to meet the applicable minimum paid-up capital requirement at the onset and the minimum capital funds requirement on an ongoing basis. This can be done by submitting a written confirmation from shareholders of the proposed digital bank on the commitment of funds.

As for JG Summit, the holding company of the Gokongwei Group, they are investing $110 million (about P5.3 billion) along with private equity fund Apis Partners to expand the Tyme brand in the Philippines, South Africa, and Malaysia.

“In South Africa, three million of our 3.5 million customers joined TymeBank through our digital kiosks deployed in retail environments. GOtyme is expected to launch in the second quarter of 2022. We believe the combination of this technology and the Gokongwei Group’s nationwide retail footprint provides GOtyme a clear path to rapid growth,” said Nate Clarke, GOtyme’s co-CEO.

What is digital banking?

According to Forbes Advisor, digital banking is designed for on-the-go people and is equipped with mobile banking apps that include the most used banking features, such as mobile check deposits, funds transfers, and bill payments. Neobanking also often has convenient features like peer-to-peer payments and sends customers banking alerts such as fraud detection and low balance notifications.

Digital banking provides faster and better services for customers. It also involves high levels of process automation and web-based services and may include APIs enabling cross-institutional service composition to deliver banking products and provide transactions. It provides the ability for users to access financial data through desktop, mobile, and ATM services.

As of 2021, the other neobanks that BSP has approved are the Overseas Filipino (OF) Bank of Land Bank of the Philippines, Tonik Digital Bank, UNOBank, and Unionbank.

Gokongwei Group’s partnership with Tyme is expected to contribute to the BSP’s goal of bringing 70 percent of Filipino adults into the banked population and having 50 percent of payments done online by 2023.

“GOtyme will leverage the Gokongwei Group’s extensive eco-system that is highly integrated into the daily lives of Filipinos—where they already shop, eat and spend family time,” said Jojo Malolos, president, and CEO of GOtyme.

Tyme and money

Tyme, which conveniently stands for “Take your money everywhere,” was launched in 2018 in South Africa. It offers interest rates to as high as eight percent per year on its savings accounts. Tyme is also offering a credit card-like payment system called MoreTyme that allows users to pay only 50 percent of an item’s price at the cashier, giving them two months to pay the rest of the bill.

TymeBank is majority-owned by South African mining billionaire Patrice Motsepe’s African Rainbow Capital along with the U.K -based Apis Growth Fund II, a fintech private equity fund based in the UK, JG Summit Holdings (JG Summit), Africa Fig Tree (AFT), a ring-fenced vehicle established by the founders along with key individuals, and the Ethos AI Fund.

“GOtyme will bring about better financial inclusion for a greater majority of the Filipinos from day one. We see our digital banking model, with onboarding and education in retail networks and a well-designed app for transacting, as the best way to provide greater financial empowerment to our customers. What Cebu Pacific has done for travel is what we plan for GOtyme to deliver in financial services,” said Lance Y. Gokongwei, president and CEO of JG Summit Holdings.