Old Mutual’s OM Bank Officially Launches to Take on Capitec in South Africa

South Africa’s already competitive banking landscape just got more interesting. Insurance giant Old Mutual has officially launched its new digital bank, OM Bank, with its sights set firmly on Capitec’s mass-market stronghold.

A Long Time Coming

Old Mutual secured its banking licence in early 2024 and has spent close to R3 billion building OM Bank since 2022. After a quiet soft launch earlier this year, the bank is now open to the public, rolling out a sleek digital-first offering aimed at millions of everyday South Africans.

Existing Money Account clients are being migrated to the new OM Bank app, with Old Mutual confirming that Money Market Accounts will remain active until the end of 2026. Customers have been encouraged to transfer their funds well before then or explore other banking options.

Who’s Leading the Charge

The bank is being steered by Clarence Nethengwe, previously Managing Director of Old Mutual’s Mass and Foundation Cluster, with Nomkhita Nqweni appointed as the inaugural chairperson. The leadership has been tasked with delivering growth despite the fact that OM Bank is expected to post losses of around R1.1 to R1.3 billion annually until it reaches profitability in 2028.

The Digital-First Play

Like TymeBank, Bank Zero, and Discovery Bank, OM Bank will not operate traditional branches. Instead, it’s betting big on a digital-first model, leveraging Old Mutual’s trusted brand, expansive distribution network, and insurance base to scale quickly. Customers can expect integrated cross-selling of insurance and investment products directly through the app, making it a one-stop shop for financial services.

Taking on Capitec

Capitec remains South Africa’s undisputed mass-market banking leader with nearly 25 million customers. Earlier this year, it overtook FirstRand as the most valuable bank in the country, cementing its dominance.

While competing with Capitec may seem like an impossible mountain to climb, Old Mutual isn’t entering the arena blind. The group has decades of experience serving South Africa’s working and middle class and was once a majority shareholder in Nedbank, one of the country’s “Big Four” banks.

The Bigger Picture

OM Bank’s arrival comes at a time when South African banking is rapidly shifting. With Bidvest Bank in the process of being taken over by Nigeria’s Access Bank, and digital players gaining traction, the market is bracing for more disruption.

Whether OM Bank can chip away at Capitec’s customer base remains to be seen. What is clear, though, is that South Africans now have more choice than ever before in how they save, spend, and bank.

Source:Business Tech 

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