It’s possible to make retail banking hip and cool, and a Vietnamese start-up called Timo is out to prove this with a latte.
Timo stands for “time is money.” It’s a digital bank with no paperwork, no queues and no branches – sort of. Its only physical presence is a modern cafe in the middle of Ho Chi Minh City called the “Timo Hangout.”
Here’s how it works: Customers walk into this café and hear the espresso machines humming. They can choose to sit and surf the internet or they can agree to listen to a soft sales pitch as they sip their free cup of coffee.
In what aims to be a relaxed setting, a Timo staff member uses an iPad to explain the digital bank’s products, such as its spending account, a “goal save” account or term deposits. Timo opens new accounts with zero deposit and offers an app customers can use to track their transactions.
Timo co-founder and chief executive Claude Spiese explains ” We don’t talk product, we don’t talk interest rates. We talk about lifestyle. We talk about people having fun.”
German-born Spiese, who has lived and worked in Vietnam for 20 years, is a former software consultant who has carefully studied the habits of Vietnamese consumers.
“We found they have lots of bank accounts; if there’s a new promotion or product, they’ll open another account,” Spiese says. “There’s not much loyalty, so our challenge is, how do we get that loyalty? It’s not through competing on 1 percent interest on products. It’s on lifestyle.”
Digital banking is still a nascent industry in Vietnam. As a digital operation that opened in January, Timo doesn’t have an actual banking license. So Spiese approached bricks and mortar retail bank, VP Bank, to be its digital arm.
“We said ‘We’ll pay for everything, we’ll finance the entire digital front end’,” Spiese says. He was armed with $5 million in seed capital from private investors. “You cover the cost of the back end which you have already built, and we split the profit from all the Timo customers fifty-fifty, a very simple deal. It’s been a great partnership.”
The Timo soft-sell has so far attracted almost 4,000 customers.