{"id":794170,"date":"2024-10-08T14:00:00","date_gmt":"2024-10-08T12:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=794170"},"modified":"2024-10-07T15:50:10","modified_gmt":"2024-10-07T13:50:10","slug":"new-south-african-bank-targeting-capitec-already-has-1-million-customers-and-mobile-products","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/banking\/794170\/new-south-african-bank-targeting-capitec-already-has-1-million-customers-and-mobile-products\/","title":{"rendered":"New South African bank targeting Capitec already has 1 million customers and mobile products"},"content":{"rendered":"\n

Old Mutual Bank (OM Bank), which is taking on Capitec in the banking space, will launch with 1 million customers and access to its own Mobile Virtual Network Operator (MVNO).<\/p>\n\n\n\n

Old Mutual unveiled its plans to launch a transactional bank in 2022, and earlier this year, the Prudential Authority granted it approval to begin testing its systems with industry partners.<\/p>\n\n\n\n

Independent auditors have also tested its systems internally and ensured its payment channels could function within the National Payments System.<\/p>\n\n\n\n

The company recently announced that it had successfully tested its systems with selected industry partners and that they had been integrated into the National Payments System. <\/p>\n\n\n\n

Old Mutual CEO Iain Williamson said their new bank is a key priority as part of their strategy to create an integrated financial services business.<\/p>\n\n\n\n

He added that pending the remaining regulatory conditions unrelated to technical readiness, they anticipate the public launch in Q1 2025.<\/p>\n\n\n\n

\u201cFor the rest of the year, we are focused on meeting the remaining Section 17 conditions and continue refining systems and capabilities to ensure a seamless launch,\u201d he said.<\/p>\n\n\n\n

Old Mutual built the bank from the ground up using cloud technology from 10x Banking, allowing it to deliver personalised, cost-effective and flexible solutions.<\/p>\n\n\n\n

These solutions will target South Africa\u2019s upper mass market and lower affluent consumers, earning between R5,000 and R80,000 monthly.<\/p>\n\n\n\n

This is the same market Capitec is serving. This means that OM Bank will compete directly with Capitec to gain market share in this segment.<\/p>\n\n\n\n

Capitec has been exceptionally successful, and not many new entrants would want to do battle with South Africa\u2019s largest bank by client numbers.<\/p>\n\n\n\n

However, OM Bank has a big advantage<\/a>. Through Old Mutual\u2019s existing Money Account, it will start with 1 million customers for its transactional banking capability.<\/p>\n\n\n\n

Old Mutual also has an unsecured lending business with a book worth R16 billion and a home loan book of over R5 billion. This can be transferred to OM Bank.<\/p>\n\n\n\n

The insurer will also leverage the existing 3.1 million low-income South Africans served by its mass and foundation insurance cluster.<\/p>\n\n\n\n

This cluster serves low-income and lower-middle-income individuals, who typically earn between R1,000 and R30,000 per month.<\/p>\n\n\n\n

Therefore, OM Bank will start with a large client base on excellent opportunities at launch, a luxury which many other new banks do not have.<\/p>\n\n\n\n

This explains why Williamson is positive about OM Bank\u2019s prospects despite South Africa\u2019s highly competitive banking sector.<\/p>\n\n\n\n

Old Mutual Connect<\/strong><\/h2>\n\n\n\n
\"\"<\/a>
OM Bank CEO designate Clarence Nethengwe<\/figcaption><\/figure>\n\n\n\n

On 7 October 2024, Old Mutual launched its own Mobile Virtual Network Operator (MVNO) service, following in the footsteps of many other banks.<\/p>\n\n\n\n

Old Mutual said it will offer \u201ccompetitive mobile services designed to meet the needs of today\u2019s dynamic and connected world.\u201d<\/p>\n\n\n\n

\u201cWe will transform mobile connectivity in the lower segment market by providing customers with unparalleled value in data packages,\u201d it said.<\/p>\n\n\n\n

Clarence Nethengwe, managing director of Old Mutual Mass Foundation cluster and CEO designate of the OM Bank, explained the strategy.<\/p>\n\n\n\n

He said their new Old Mutual Connect service is a part of our Integrated Financial Services (IFS) strategy to deliver tangible value-added services to their customers.<\/p>\n\n\n\n

\u201cAffordable data and reliable connectivity are critical for our customers in the Mass Market to fully participate in the mainstream economy,\u201d he said.<\/p>\n\n\n\n

\u201cIt is also an important enabler for our customers to interact with the rest of our propositions digitally.\u201d<\/p>\n\n\n\n

\u201cOur MVNO will be leveraging a multi-operator core network agreement to deliver reliable and highspeed mobile services,\u201d he said.<\/p>\n\n\n\n

Old Mutual Connect will allow customers to get a SIM card from any Old Mutual branch, starting at R5.<\/p>\n\n\n\n

Customers can also buy data and airtime from various channels, including at branches, through its partners, and online.<\/p>\n\n\n\n

It further promises a simple onboarding process, with assistance to RICA users\u2019 SIM or port their number.<\/p>\n\n\n\n

Capitec not too concerned<\/strong><\/h2>\n\n\n\n
\"\"<\/a>
Capitec CEO Gerrie Fourie<\/figcaption><\/figure>\n\n\n\n

OM Bank is clearly following the playbook which made Capitec successful, focussing on affordability, accessibility, personal service, and simplicity.<\/p>\n\n\n\n

Launching, or at least having access to, a Mobile Virtual Network Operator further duplicates Capitec\u2019s strategy.<\/p>\n\n\n\n

However, Capitec CEO Gerrie Fourie said<\/a> they are not particularly concerned about the imminent launch of OM Bank or other local competitors.<\/p>\n\n\n\n

Fourie said Old Mutual has been a bank for quite a while. \u201cThey rented a bank license. So, the offer has been the same,\u201d he said.<\/p>\n\n\n\n

The only difference is that Old Mutual is now getting its own banking license and banking system.<\/p>\n\n\n\n

\u201cWhat that offer looks like we haven\u2019t seen, but I don\u2019t expect that it will materially change from what they\u2019ve done in the past. So, let\u2019s wait and see what comes out of the banking system.\u201d<\/p>\n\n\n\n

Fourie said Capitec has built quite a compelling offer over the past couple of years, and this can be seen in the bank\u2019s results.<\/p>\n\n\n\n

Capitec has produced strong results for the first half of its 2025 financial year, with headline earnings surging 36% and return on equity nearing 30%.<\/p>\n\n\n\n

The bank had also reached 23.2 million active clients. \u201cOur strong results demonstrate the strength of our diversified business model,\u201d Fourie said.<\/p>\n\n\n\n

\n\n\n\n

Read: Capitec joins the chorus of warnings for South Africa<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

OM Bank, which is taking on Capitec in the banking space, will launch with 1 million customers and access to its own Mobile Virtual Network Operator (MVNO).<\/p>\n","protected":false},"author":10,"featured_media":768049,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[961],"tags":[1798,20195,20539,20635,20636,20537,20634],"class_list":["post-794170","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banking","tag-capitec","tag-gerrie-fourie","tag-iain-williamson","tag-mobile-virtual-network-operator-mvno","tag-national-payments-system","tag-old-mutual-bank","tag-om-bank"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/794170","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=794170"}],"version-history":[{"count":3,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/794170\/revisions"}],"predecessor-version":[{"id":794193,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/794170\/revisions\/794193"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/768049"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=794170"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=794170"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=794170"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}