Business
OM Bank Set to Challenge Capitec in South Africa’s Retail Banking Market
OM Bank, Old Mutual’s highly anticipated new banking venture, is set to launch in South Africa in 2025, positioning itself as a strong competitor to Capitec in the mass-market banking space. With regulatory approval granted by the Prudential Authority in 2024 and Clarence Nethengwe appointed as CEO in January 2025, the bank is gearing up for a soft launch in Q2 before a full-scale rollout in Q3.
A New Approach to Retail Banking
Unlike traditional banks that often apply a one-size-fits-all model, OM Bank aims to introduce transformational banking—a system that helps customers improve their financial status rather than rejecting them outright due to credit limitations.
Old Mutual, with nearly 180 years of experience in financial services, plans to leverage its extensive customer data and financial expertise to deliver a more tailored banking experience.
While OM Bank is not targeting the unbanked sector, it recognizes that many South Africans, despite having bank accounts, remain underserved with limited access to financial products. The new bank aims to bridge this gap by offering transactional banking and credit solutions that go beyond basic banking services.
Capitec vs. OM Bank: A Market Shake-Up?
With over 23 million customers, Capitec dominates South Africa’s retail banking market. While OM Bank is entering new territory, Old Mutual has already been competing with Capitec in micro-loans and credit services. However, OM Bank does not currently have plans to challenge Capitec in business banking.
The biggest difference? OM Bank will be a digital-first bank.
Capitec’s extensive branch network has long been a key strength, but OM Bank aims to use technology to enhance convenience and customer engagement. Despite this digital-first approach, the bank will still leverage Old Mutual’s existing branch networks for branding and customer support.
The move follows a growing trend in South Africa’s banking industry, where digital banks like Discovery Bank, TymeBank, and Bank Zero are gaining traction.
What to Expect from OM Bank’s Launch
- Digital-First Banking – Customers will primarily interact with OM Bank via digital platforms.
- Competitive Pricing – The bank aims to provide cost-effective banking solutions.
- Customer-Centric Approach – Instead of outright product rejections, OM Bank will help customers improve financial standing.
- Strong Compliance & Governance – The bank is focused on regulatory compliance, including setting up Key Individuals (KIs) and Executive Committees (EXCOs).
- Hiring Top Talent – The bank is actively recruiting to build a highly skilled team.
With its digital-first model and transformational banking strategy, OM Bank is entering a competitive market with a unique approach. As South Africa’s banking landscape continues to evolve, it remains to be seen how this new player will impact the dominance of Capitec and other established banks.
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