Bank Zero, the South African app-only bank, has reached break-even five years after opening to the public, with a partnership model that could now let it scale far beyond its own customer base.
The lender recorded its first break-even month in August, meaning its revenue covered its operating costs for the month. It does not mean the bank has become consistently profitable, and Bank Zero expects earnings to remain uneven in the short term.
Its next phase will rely on using its banking infrastructure to bring customers from fintechs, retailers, and digital platforms onto its platform. Bank Zero has 275,000 direct customers, while its alliance-banking partnerships are bringing another 500,000 customers onto the platform, although some overlap with its existing base.
The scale of the alliance-banking strategy marks a significant change for a bank originally designed to reach profitability with around 100,000 customers. Its challenge now is to show that the technology and cost structure that got it to break-even can support a much larger business.
Originally published by TechCabal.