• TN CyberTech has transitioned into a neobank to enhance financial inclusion and address challenges in  the informal sector
• The bank reported a 43% revenue increase, driven by digital innovations
• The bnk introduced new offerings like the MasterCard E-Commerce platform
• TN CyberTech aims to reduce operational costs and improve competitiveness through a fully digital banking model

Harare-TN CyberTech Investments Holdings Limited, formerly EcoCash Holdings, has delivered a strong Q1 performance after pivoting to a neobank model, driven by the need to tackle challenges facing Zimbabwe's businesses and financial institutions, as highlighted by OK Zimbabwe's difficulties.

TN CyberTech reported a 43% revenue increase to ZWG273 million for the quarter ended May 2025 compared to the previous year, with a 14% rise from the prior quarter, driven by growth in interest income and key digital revenue streams.

Cost-saving measures, including staff rationalisation and the internal development of digital solutions to replace third-party systems, contributed to sustained profitability.

“The economy remains largely informal with one of the legacy supermarkets, OK Zimbabwe, showing significant signs of strain, presumably under stiff competition from the informal sector,” Group CEO Tawanda Nyambirai said in a trading update.

“To consolidate its profitability, the bank must transform into a NeoBank in order to cut its channel costs, increase its deposit base and consequently its loan book size, broaden its sectoral coverage to include mining and agriculture and develop new products that cover the informal sector.”

OK Zimbabwe has encountered severe difficulties due to competition from the unregulated informal market, exacerbated by porous borders allowing substandard and standard imported goods from countries with stable currencies and supportive governments.

These imports have disadvantaged local retailers, who face foreign currency shortages, an overvalued local currency exchange rate, and a challenging taxation environment. As a result, large-scale retailers like OK Zimbabwe have been forced to downsize operations or shut down entirely, leading to significant store closures and employee layoffs.

This economic backdrop has driven TN CyberTech’s decision to pivot to a branchless, fully digital neobank model to reduce operational costs and enhance competitiveness.

The transformation followed the successful restructuring of EcoCash Holdings, which separated Steward Bank (now TN CyberTech Bank Limited) from EcoCash and other Econet offerings, with the latter returning to Econet.

Neobanks are digital-only financial institutions that operate without physical branches, leveraging mobile apps and online platforms to offer banking services with lower fees, user-friendly interfaces, and innovative features.

Globally, the neobanking market is booming, valued at USD 154.9 billion in 2024 and projected to reach USD 5,056.7 billion by 2033, with a CAGR of 47.3%. Europe leads with over 30.6% of market share, driven by supportive regulations and high adoption in the UK, where neobanks like Monzo (10 million+ customers) and Revolut (40 million customers) thrive.

Asia-Pacific is the fastest-growing region, fueled by high smartphone penetration (e.g., 54% in India, projected to hit 96% by 2040) and demand for digital solutions in underbanked markets.

In Latin America, Brazil leads with 43% neobank adoption, driven by Nubank’s 100 million+ user base, which targets underbanked populations. In Africa, neobanks like TymeBank in South Africa have achieved profitability by focusing on digital convenience and financial inclusion.

Neobanks succeed by prioritising customer-centric experiences, leveraging AI and machine learning for personalisation, and reducing costs through branchless operations. They often target niche segments like SMEs, gig workers, or underbanked populations, using freemium models or subscription tiers to drive revenue.

However, profitability remains a challenge, with fewer than 5% of the 400 global neobanks profitable, earning less than USD 30 per user annually. Regulatory hurdles, thin margins, and competition from traditional banks and fintechs also pose risks.

To bolster its neobank status, TN CyberTech launched the MasterCard E-Commerce platform, integrated with EcoCash, ZimSwitch, MasterCard, and Visa during the quarter, enhancing customer convenience and enabling international online card payments.

Similar offerings have been introduced by competitors like ZB Financial Holdings and FBC Holdings, indicating a broader trend in Zimbabwe’s financial sector toward digital payment solutions.

Additionally, TN CyberTech introduced cardless ATM deposits and ZIPIT to EcoCash USD mobile and online payments, further aligning with global neobank practices that emphasise seamless, technology-driven services.

These innovations mirror those of leading global neobanks like Revolut, which offers multi-currency accounts and instant transfers, and Nubank, known for its low-cost digital accounts and blockchain-based services.

However, many African neobanks, such as FairMoney and Carbon in Nigeria, struggle with credit impairments and currency devaluation, highlighting the challenges TN CyberTech faces in Zimbabwe’s volatile economy.

The bank plans to conduct third-party evaluations and certifications to ensure its technological platforms meet world-class standards, a practice akin to global neobanks like N26, which emphasise robust cybersecurity and compliance.

TN CyberTech’s focus on delivering memorable customer experiences through digital touchpoints aligns with global trends, where neobanks like Monzo use AI-driven personalisation to enhance user engagement.

However, unlike Monzo or SoFi, which benefit from larger, more diversified markets, TN CyberTech must cater to Zimbabwe’s unique informal sector and economic constraints, requiring tailored products like those for agriculture and mining.

Strategies

To scale significantly, TN CyberTech can adopt and adapt strategies from successful global and regional neobanks, focusing on customer acquisition, product diversification, financial inclusion, and technological innovation.

Nubank in Brazil has grown to over 100 million users by targeting underbanked populations, offering high-yield savings accounts and microloans with flexible credit assessments. Its focus on Latin America’s unbanked (60% of its users as primary banking relationships.

Zimbabwe has a large informal sector (over 60% of the economy) and underbanked population due to economic instability and limited banking access. TN CyberTech can expand its product offerings to include microloans and savings accounts tailored for informal traders, farmers, and miners, as outlined in its trading update.

By leveraging EcoCash’s existing mobile money user base, TN can offer seamless onboarding via eKYC (electronic Know Your Customer), similar to Nubank’s instant account openings. Partnerships with local cooperatives or agricultural boards could enhance outreach to rural and informal markets.

Revolut uses machine learning to analyse transactions, offering real-time fraud detection (90% accuracy) and personalised financial insights, enhancing user trust and engagement. Chime in the US provides data-driven budgeting tools, helping users manage spending. Jupiter in India uses AI to analyse spending patterns, boosting its user base by 50% in a year through tailored financial recommendations

TN CyberTech can invest in AI-driven tools to offer personalised budgeting advice and savings plans for Zimbabwe’s volatile economy, where hyperinflation erodes purchasing power.

Integrating chatbots for 24/7 customer support, as 65% of banking customers value constant availability, could enhance user experience. Real-time fraud monitoring would build trust in a market wary of digital platforms due to cybersecurity concerns.

Monzo in the UK partners with TransferWise for international transfers in 30+ currencies, diversifying its offerings without building new infrastructure. Nubank expanded from credit cards to insurance and cryptocurrency trading, broadening its revenue streams.

In South Africa, TymeBank partners with retailers like Pick n Pay to offer cash-in/cash-out services at tills, enhancing accessibility for underbanked users.

TN CyberTech’s MasterCard E-Commerce platform is a step toward diversification, but it could further partner with global fintechs like Wise or local players like ZimSwitch to expand remittance services, critical in Zimbabwe due to its diaspora. Collaborations with retail chains or mobile network operators like Econet could enable cash-in/cash-out points at agent kiosks, mirroring TymeBank’s model, to serve rural areas with limited internet access.

Neobanks like Klarna integrate “Buy Now, Pay Later” (BNPL) options into e-commerce platforms, increasing transaction volumes and revenue. In Nigeria, FairMoney embeds microloans into merchant platforms, targeting small businesses and informal traders.

TN CyberTech could partner with local e-commerce platforms or informal market aggregators to offer BNPL or microcredit solutions, addressing the credit needs of OK Zimbabwe’s struggling retail customers. This would drive transaction volumes and align with its goal to develop products for the informal sector.

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