Shake-up for banking in South Africa – these are the trends to watch

 ·28 Jan 2023

Coenraad Jonker, the CEO and co-founder of fully digital TymeBank, says that the banking industry in South Africa is going through a shake-up, and more shifts are on the way as operations become increasingly digital.

TymeBank, founded in 2019, revealed this week that it has hit over 6.1 million active customers in South Africa, pushing further into digital banking for individual and business customers in the country.

Digital-only banks – finance groups that lack the branch structure of legacy banks – have been growing in number and popularity in the country, with the likes of Discovery Bank and Bank Zero operating in a similar space to TymeBank, though targeting different markets.

Through the disruption of digital, the South African banking industry has been forced to rapidly digitize in line with consumer behaviour, with more customers preferring to conduct their banking online or through mobile apps rather than heading into a branch.

This shift has led to the rise of simplified, digital accounts – even among the legacy banks – with transactions being tracked and managed through the cloud on web services such as Amazon Web Services (AWS) or Microsoft Azure (Azure).

There are, of course, pros and cons to the new vs the old. Newer, digital banks offer many of the same services as traditional banks, but with the added convenience and flexibility of being accessible from anywhere with an internet connection.

However, more complex financial needs – such as home loans, vehicle financing, credit and investment services – are still more easily accessible through legacy banks.

Despite this, things are still changing: digital banks are becoming increasingly sought after in the business sector – particularly with SMEs – while other fintechs are also cropping up to take on the legacy banks in financing, credit, insurance and other financial services.

In light of these developments, Jonker said that he expects the following emerging banking trends to drive banking in South Africa and across the globe:

Acceleration of digital adoption

Jonker said that the first emerging trend is the acceleration of digital adoption by customers. According to the CEO, more customers have wished to conduct their banking digitally since the pandemic.

He expects this trend only to continue further.

Overall, digitization has been on the cards for South African banks for a while now.

In the first half of 2022, financial services firm PwC said that the major banks focused on customers’ experience through digitization and, as a result, all saw their combined headline earnings soar passed pre-pandemic levels.

Embedded finance

Embedded finance, also known as contextual banking, refers to integrating financial services into the products and platforms of non-financial companies in South Africa.

This new trend offers consumers access to financial services more conveniently and efficiently.

“We no longer ask customers to come to the bank; we bring the bank to the customers and embed the customers in the places where customers shop, work or do business. We make banking part of their lives,” Jonker said.

Open Banking

According to Jonker, there will be more sharing of banking information across the board, and regulators will push for more transparency and the interchanging of data – subject to customers’ privacy requirements.

Locally, Nedbank has been a big proponent of this shift and has for several years pushed for the sharing of data and APIs to create better products and services for customers.

Alternative data

Banks are set to rely more on alternative sources of data, Jonker said.

For example, TymeBank’s most recent partnership with The Foschini Group (TFG) has allowed it to access a wider consumer base and use data from transactions and money behaviours to manage risk and benefit the customer.

Discovery Bank, another digital bank, has leaned heavily into behavioural banking, leveraging its experience with the Vitality programme and Discovery Health to use behavioural data to guide better financial health.


Jonker expects other banks to engage with the non-banking industry, including retailers. TymeBank has partnered with TFG, grocery store giant Pick n Pay and more. Many of the local banks have partnered with companies across various industries – largely through rewards programmes – but this is expected to increase.

Jonker said that despite it being early days for digital banks in South Africa – the legacy banks are world leaders in digital channels.

He said that the movement towards fully digital banking is in its starting phase. He added that South Africa is on an exciting tipping point of digitization, with the next ten years or so poised to show drastic changes with fintech companies offering banking services and visa versa.

Read: Big changes for TymeBank and one of South Africa’s biggest retailers

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