Three years have passed since Lifestyle Project Management and Vietnam Prosperity Joint Stock Commercial Bank (VPBank) launched Timo, the country’s first bank that has no traditional branches or transaction offices.
Formed in March 2015, Timo officially opened its doors in early 2016 with the launch of the Timo Hangout in Ho Chi Minh City. Timo Hangouts serve as bank branches but without the allure of one. Instead of a traditional branch with tellers, Timo Hangouts have a cozy coffee shop and are used to open accounts or to simply meet up with friends.
Since its inception, Timo has been rapidly expanding, opening three other Timo Hangouts in Hanoi, Da Nang and Can Tho.
In Vietnam, the digital bank has been found to be an attractive product, notably to the young, digitally-savvy population. By the end of 2016, Timo had signed up more than 24,000 customers and recorded over US$4 million in deposits.
Today, Timo’s user base is “well into into the mid-hundreds of thousands of customers with an average monthly active rate of 65% plus,” Cameron Warden, CEO of Timo, told Fintech News Singapore.
And there are many reasons why Timo is appealing to consumers. First, nearly every transaction, including money transfers, payments, opening a term deposit and managing accounts, can be done remotely, through the mobile app. Customers only need to meet a Timo Care Representative in person at a Timo Hangout when initially opening an account. The process is quite straightforward and only involves standard KYC/AML procedures and checks.
Second, almost all services are provided for “free”.
Additionally, recent partnerships with the likes of Sun Life Financial, Liberty Insurance and VinaCapital are enabling customers to easily and conveniently buy insurance products and invest in an open-end fund directly through the app.
The potential of digital banking in Vietnam
Although Vietnamese banks had been working on digitizing their offerings, it wasn’t until the launch Timo that Vietnamese consumers got a taste of real, true digital banking. And the sector is expected to witness massive growth in the years to come, fueled by Vietnam’s young, connected population, rising Internet and smartphone penetration, and growing middle class.
“Despite the fact that many customers still stick with traditional banking, digital banking services have been growing rapidly and are expected to replace traditional banking gradually,” Do Danh Thanh, technology consulting director at PwC Consulting Vietnam, told VIR.
“There is huge potential for digital banking to become the norm because of the core values that it delivers, such as simplicity, connectivity, and effectiveness.”
In addition to enabling banks to serve customers in a timely and highly interactive manner, a digital bank can yield substantially higher economic benefits compared to the traditional operating model, he said.
The ecosystem strategy
With Timo being a success and considering the huge growth potential of digital banking, VPBank launched in 2018 its very own digital bank called YOLO, which in addition to standard banking services, allows customers to access services such as taxis, movies, hotel bookings and food and beverage orders.
Replicating the strategy that has made Chinese tech giants Tencent and Ant Financial global fintech leaders, YOLO is pursuing the idea of providing a digital ecosystem with diversified services combined with a bank.
“Our customers start their day with different needs and rarely with the use of financial and banking services,” Shameek Bhargava, director of YOLO, told Vietnam News in October 2018.
“They repeatedly use taxis, listen to music, watch movies and order food and drinks. YOLO provides customers with daily necessities they need, in addition to the products and services of a true bank.”
Moving forward, Warden said Timo “will continue to innovate on the delivery of banking products with a transparent and customer-first approach at the core of what we do.”
How to open a Timo account?: Register via the TIMO website, visit a TIMO hangout to open an account and activate your bank card and download the TIMO app onto your phone.
