South Africa’s banking sector is bracing for a shake-up as Old Mutual prepares to launch OM Bank, a fully digital-first institution set to compete directly with Capitec, the country’s leading mass-market bank.
OM Bank, which secured its licence from the South African Reserve Bank in 2024, is gearing up for a soft launch later this year before rolling out to the public in late 2025.
The bank is targeting South Africans earning between R1,000 and R30,000 per month, a segment long dominated by Capitec.
Unlike traditional banks, OM Bank will operate primarily on a cloud-based platform, offering flexible, low-cost services designed for mobile-first customers.
It will also integrate with Old Mutual’s financial ecosystem, allowing seamless cross-selling of insurance and investment products.
Adding to the competitive edge, Old Mutual is launching its own mobile virtual network operator (MVNO), mirroring Capitec’s strategy of offering affordable data packages to strengthen digital engagement.
Analysts note that OM Bank is not entering the market empty-handed. It starts with a built-in customer base of nearly 1 million existing Old Mutual account holders, plus access to millions more through the insurer’s policyholders.
This gives it a head start in reaching the very customers Capitec has captured over the years.
Capitec, however, is unfazed. CEO Gerrie Fourie has dismissed OM Bank as a threat, suggesting that global tech players like Apple and Meta pose a far bigger challenge to traditional banking than local rivals.
Still, with R2.8 billion already invested and a bold plan to break even by 2028, OM Bank’s entry could signal a new banking war in South Africa, with mass-market customers set to benefit the most.
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