South Africa’s new bank taking on Capitec

Old Mutual’s new bank, OM Bank, will launch in South Africa this year and is set to take on Capitec in the mass market.

The new bank received regulatory approval from the Prudential Authority in 2024. Clarence Nethengwe was appointed as its CEO in January 2025.

OM Bank, which cannot carry the Old Mutual name due to regulatory requirements, is set to see a soft launch in Q2 of this year. The new bank will see a broader launch in Q3.

The bank will offer transactional banking in the mass market and will have a credit offering.

The group, which has nearly 180 years of experience, believes it can leverage its data as an integrated financial services group to enhance customer satisfaction.

OM Bank will focus on being a transformational bank. It believes that traditional banks have become too conventional in their offerings, taking a one-size-fits-all approach.

The group said that a bank will also go beyond traditional practices and will not simply turn customers away because they do not qualify for certain products at that stage.

Instead, it would partner with customers to improve their financial situations, hoping to guide them to a place to offer banking products that meet their needs.

In addition to its hope of transformational banking services, the group believes that customers will be very satisfied with pricing.

It does not target the unbanked sector, as it believes that even banked South Africans can often be underserved or underbanked and have limited access beyond basic banking services.

With a large customer base within the Old Mutual finance stable, the group plans to present the OM Bank to its customers.

The group is also looking at a broader strategy rather than focusing solely on its existing customer base. However, the group has admitted that this strategy has not yet fully crystallized.

Taking on Capitec

OM Bank will be entering a competitive market. Capitec is the dominant player in the retail mass market banking sector, with over 23 million customers.

Although Old Mutual is entering a new market, the two companies have already competed for several years, especially in the micro-loan industry.

However, Old Mutual has no immediate plans to compete with Capitec in the business banking space, as it is focusing on bringing transformational mainstream banking to customers.

Another difference is that OM Bank will have a digital-first approach. Although Capitec has an award-winning banking app, its extensive branch network is one of its key advantages.

Old Mutual said the digital-bank approach will allow OM Bank to work more closely with its customers. It added that the digital-first approach will add greater convenience to customers,

Despite being a digital-first bank, the group will still use its existing branch networks to broaden its customer branding experience.

The digital-first approach aligns with recent trends in South Africa. Discovery Bank, TymeBank, and Bank Zero all leverage technology and have little to no physical interaction.

When it comes to OM Bank’s launch, it will focus on recruiting top talent to build a skilled team.

With the bank being digital-first, robust systems integration and conducting thorough stress testing to ensure smooth operations at launch will be crucial.

It will also prioritise compliance with all the necessary governance frameworks, such as establishing Key Individuals (KIs) and the Executive Committee (EXCO) structures.

Moreover, since building a transformational bank is a ‘lifelong journey,’ the group believes that it will not be a sprint but rather a marathon.