Digital newcomers out to disrupt South African banking

Three South African digital banks are betting on aggressive pricing and data analytics to attract tech-savvy, price-conscious consumers when they launch next year, really challenging the old guard.

It will be first time the $30 billion industry has faced competition since the early 2000s, when Capitec Bank pushed itself into a sector dominated by Absa, FirstRand, Nedbank and Standard Bank.

The mobile banking newcomers, Discovery Bank, TymeBank and Bank Zero, all expect to have substantially lower cost-to-income ratios than the big lenders, possibly disrupting the pricing of South African retail banking products.

While the newcomers’ focus is South Africa, Bank Zero, for one, said it may look at other emerging markets in due course, and investors say because all three have strong IT platforms and use digitalization, it should be easier to expand.

According to, the challenge in South Africa is to make inroads in a market where over 80 percent of the population already have bank accounts. Elsewhere in Africa, 350 million people have no form of bank account.


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