Founded in 2006, by Moscow-based digital bank, Tinkoff. Using credit cards, they began, then moved on to debit cards, deposits, and simple transactions. From 2000 to 2012, mobile and internet penetration in Russia increased from 4% to 63%. Apps and digital wallets became ubiquitous and payments became simple. Tinkoff was a client of mine who benefited from this growth and quickly latched in and grew enormous leaps and bounds of user acquisition, wallet, and payment volume. The OG super app is Tinkoff today. Tinkoff ecosystem is not only financial products but full-blown lifestyle banking use cases. Tinkoff has its customers hooked by providing them with a list of services to meet all their needs. That strategy that came from the early days, was to become a super app and it meant you could engage more with the users. Services customers would find in one platform are Recommendations and guides to the customers of what they can do next with their money (investment advisory). A Great interface with customization which engages the customers, Seamless and Cashless payments. All is done online with utmost security, it has turned into a one-stop shop or GTM for clients, making it possible to do a couple of things simultaneously.
Tinkoff super app: Redefining lifestyle banking in Russia
Tinkoff super app is their marketplace with thousands of merchants. Health & beauty, food & delivery, ride-hailing, entertainment, culture & education, fitness, cleaning, and many more are all shown by the merchant’s offerings. Tinkoff is one of the top fintech innovators in Russia. After all, they are offering more than just lifestyle banking, some of the features they have in their super app include. Daily Banking financial products of the bank, discovering other new products, ordering documents, 24/7 live chat support, Apple Pay, Samsung Pay, Google Pay (which facilitates easy transactions for a variety of different users), crowdfunding, etc. Payments and transfers: Government services, traffic police fines, quick payment system, subscriptions to accounts from government agencies, payment automation, QR code operations, unique Tinkoff ID, wallet with ecosystem products, Tinkoff Junior: Banking for children from 7 years old, child geolocation, standalone Tinkoff Junior app, baby lifestyle services, etc., bonuses: Management of cash backs, bonuses, points, lifestyle cashback, special offers, voice assistant Oleg,
LifestyleBanking is the neo-bank’s priority in Russia because it bundles value & add-on services such as travel & entertainment booking, a mobile network & a #SuperApp that’s a Jack of all trades to address all financial & day to day lifestyle needs.
All these achievements are pretty evident through their numbers:
- As of June 2020, 2 million users, and an incredible 6.1 million monthly active users.
- A $5.6 billion valuation on the London Stock Exchange.
- The share of non-credit revenues increase from 30 pct to 37 pct in H1 2020.
- 22% net profit ratio and a healthy 37% cost-to-income ratio for FY19.
While the neo-banks race is starting to settle into its groove, Tinkoff has emerged as the wild card, and it does not seem to be slowing down anytime soon.
Sanctions
Tinkoff Bank had its credit rating withdrawn in March 2022 as a result of the sanctions on Russia’s invasion of Ukraine. In its 10th package on sanctions in February 2023, the European Union adopted sanctions against the bank. In July 2023, the US also imposed sanctions on the bank. The bank was banished from correspondent banking relationships by the United Kingdom with a ban in December 2023.
In February 2022, when foreign economic sanctions over the Ukraine invasion caused a collapse of the ruble, a glitch in the Tinkoff system was exploited by the bank’s clients. At the end of February 2022, a thousand Tinkoff Bank clients first exchanged rubles for pounds sterling and then for dollars. Buying dollars for only 88 rubles at the real price of 150 rubles. That led to a series of lawsuits between Tinkoff and its foreign exchange clients.
Tinkoff Bank decided to move to Russia in January 2024. Sanctions dictated this, and also since, as per the law of the Russian Federation, the bank (TCS Group company) is a non-resident of an ‘unfriendly’ state. Ranked on Russky Island in the Far East of Russia under the MKPAO TCS Holding name, TCS Group was registered on February 26. This is one of two of these so-called Russian offshores, where advantageous taxation is provided. Tinkoff Bank pulled off the London Stock Exchange in January 2024.
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