SESSION 4 (Fintech) Lecturer: ANAM FAZAL

Collaboration of finance and technology companies

In the business world, countries are now borderless. For the modern era of fintech, collaboration has a significant
impact rather than competition. It provides a win-win situation. The future of banking is collaboration with big
tech companies. With the help of collaboration, consumers, finance companies and technology companies all
benefit mutually. Wins for each of them are as under:

Consumers: 1)The increased convenience that comes with a single digital platform that allows customers to
access their chosen providers with a consistent user experience. 2) Complete digital and physical ecosystems that
may include the user experience of tech combined with deep financial insights based on a holistic understanding of
customers and their needs, a vast network of ATMs, market leading mobile technology and so much more. 3) The
creation of an intuitive experience that enables consumers to better manage their money and feel in control of their
finances.

Finance companies (Banks): 1) The ability to achieve scale, faster. These technology companies , with their
millions of loyal customers, provide a potential customer base that would take years and millions of dollars for
financial institutions to achieve on their own. 2) The halo effect of a global brand intertwined with the bank’s. We
know that consumer brand loyalty is strong among technology companies. Banks, which are traditionally more
commoditized, benefit by association with them. 3) It’s fair to say that digital experiences are integral to success in
the tech industry. They know what their customer wants and needs, and they build it beyond all expectations. As a
collaborator, banks have a front row seat to watch, learn and understand how they do it.

Tech companies: 1) Ability to leverage financial institutions’ institutional knowledge. Banking is a highly
regulated industry with regulations that are constantly in flux. Banks not only understand regulatory compliance
and the legal framework established by various supervisory authorities, but they are specifically staffed to remain
in compliance with them. 2) By working with banks, technology companies do not need to pursue a banking
charter to operate, which can be a time-consuming and expensive proposition. Working with a bank allows these
companies to focus on their core business, while providing increased convenience to customers and building
customer loyalty in the process. 3) Banking services provided in cooperation with a bank give technology
companies the opportunity to diversify and serve a new customer need without the heavy lifting.

CASES: Avoka, Bankable, TymeBank

TymeBank

TymeBank is digital retail bank in South Africa with no physical branch which is saving time of customers by
opening their accounts in 5 minutes. AI is being applied in all levels of office operations by the use of AI
algorithms, Know Your Customer(KYC) and Anti-Money Laundering(AML) approaches. TymeBank
communicates efficiently with customers and its operations are performed through online banking and kiosks.

TymeBank has educational app named TymeCoach that guides people against their wealth. It involves no human
and its operations are run by online banking and kiosks. It not only provides efficient customer service but saves
costs also. This bank’s card replacement charges are R40 as compared to R110 of South Africa’s First National
Bank.