Its success has forced South Africa\u2019s other banks to\u00a0compete more effectively<\/a><\/strong>, and has led to Absa and FNB in particular to launch entry-level accounts that target Capitec\u2019s market approach.<\/p>\n However, Capitec will soon face stiff new competition of its own, through Patrice Motsepe’s Tyme which promises to cause ‘disruption’ of its own through a digital play.<\/p>\n Tyme joins insurance giant Discovery, which also plans to launch a commercial bank, while government has plans for a retail offering of its through the South African Post Office\u00a0 – all of which are expected to launch sometime between now and late 2018.<\/p>\n Each offering brings with it unique features which could entice customers from the current “big five”.<\/p>\n Billionaire Patrice Motsepe made headlines <\/a><\/strong>last week after he announced that he was\u00a0set to challenge South Africa\u2019s biggest banks with\u00a0investment company<\/span>\u00a0African Rainbow Capital (ARC) close to securing a banking license.<\/p>\n Tyme was granted a provisional license by the South African Reserve Bank\u00a0 in 2016, with\u00a0Johan van der Merwe, co- CEO of African Rainbow Capital stating that the company expected a full licence before the end of September.<\/p>\n “The South African banking environment is due for a bit of disruption,” said van der Merwe.<\/p>\n \u201cWhile Capitec has been able to play that role, the soon-to-be-licensed lender will be a disruption over and above that. This will be a complete game changer.”<\/p>\n \u201cThe regulator is looking at the cloud-based system that ARC\u2019s fintech partner is using to make sure it works before granting a full licence,\u201d he said.<\/p>\n Tyme is reportedly signing up\u00a05,000 new customers each week, following the Commonwealth Bank of Australia\u2019s acquisition for a reported AU$40 million.<\/p>\n Arguably, Tyme’s biggest asset is its in-house developed “know your customer”<\/span>\u00a0KYC accreditation solutions.<\/p>\n These\u00a0allow customers to open a simple bank account over their mobile phone, and open an unrestricted bank account\u00a0 from a remote location instead of having to enter a bank branch.<\/p>\n This form of unrestricted account access and cloud-based solutions is likely to tie-in with\u00a0African Rainbow Capital’s July announcement<\/a>\u00a0<\/strong>that it invested in 20% of fixed and mobile data network operator Rain.<\/p>\n In March 2017, Discovery <\/a><\/strong>said that it had\u00a0received authorisation\u00a0from the Registrar of Banks to establish banking operations in South Africa, and is on track to launch its banking products next year.<\/p>\n Discovery CEO, Adrian Gore first announced plans for a retail bank in 2015, and stated that it would act as a direct competitor to\u00a0Absa, FNB, Nedbank, Capitec, and Standard Bank.<\/p>\n The insurer has reportedly seen great success with \u00a0its Discovery Card joint venture with FNB, which would provide\u00a0a launch pad for full banking services.<\/p>\n \u201cWe\u2019ve got the capital, we\u2019ve hired bankers, we\u2019re building substantial systems. We want to make an offering that\u2019s relevant and can win market share,\u201d said Gore.<\/p>\n Discovery has an advantage over the big four traditional banks, as it does not have to maintain a country-wide network of branches and ATMs. This means Discovery Bank\u2019s costs have the potential to be lower than its competitors.<\/p>\n Former FNB CEO Michael Jordaan also believes that the technology available to Discovery could make it a major disruptor in the financial sector as it uses its vast resources and lower cost base to offer clients lower banking fees and better interest rates.<\/p>\n While not as eye-catching as Tyme or Discovery, the South African Post Office (SAPO) could prove to be a large disruptor in the financial sector because of its ease of accessibility.<\/p>\n Speaking at the World Economic Forum in May, telecommunications minister Siyabonga Cwele said that the Post Office\u2019s transition <\/a><\/strong>into a development bank will be\u00a0government\u2019s first big step in “radically transforming the financial sector and challenging the current banking institutions”.<\/p>\n \u201cIt\u2019s not going to be a normal bank like the big four. It\u2019s going to be a developmental bank to deal with the market that is not being served at the moment,\u201d said Cwele.<\/p>\n He added that, despite the higher risks involved, the\u00a0Post Office will also look at\u00a0funding entrepreneurs with small loans.<\/p>\n \u201cWe are going to need a very strong risk management system. The issue of financial inclusion is part of radical economic transformation. We are not talking about reckless access to finance.\u201d<\/p>\n Current SAPO\u00a0CEO Mark Barnes will likely head up the new bank, which is expected to become a fully-fledged consumer bank sometime in 2018.<\/p>\n The bank could also be bolstered massively should it acquire the rights to distribute social grants to over 17 million<\/a><\/strong> South Africans from SASSA.<\/p>\n
\nTyme<\/h3>\n
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\nDiscovery<\/h3>\n
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\nThe South African Post Office<\/h3>\n
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