South Africa’s banking space — already one of the most competitive in emerging markets — has just welcomed a new contender. Insurance giant Old Mutual has officially launched OM Bank, a digital-first challenger built to rival Capitec Bank, South Africa’s biggest bank by customer numbers.
The launch, quietly rolled out to existing Old Mutual Money Account clients in August, signals the start of what could be one of the fiercest battles in local banking history.
A soft launch turns official
Emails have gone out to Money Account customers urging them to download the new OM Bank app and migrate their accounts. While the Money Account will remain usable until the end of 2026, all transactions will eventually be switched off.
“As a valued customer, you’re among the first to be eligible to sign up to this new banking offering, ahead of everyone else,” Old Mutual told clients.
The move follows months of internal testing by Old Mutual employees and early adopters, with public onboarding now underway ahead of a full rollout later in 2025.
What OM Bank is offering
The new banking institution has pledged to deliver the following:
- Low fees — just R4.95 monthly, with no initiation fees.
- Digital sign-up in minutes — no paperwork, all via mobile.
- My Mobile Banker — an AI-driven tool for budgeting, spend tracking, and goal setting.
- Rewards — 10% back in points on qualifying credit spend and 2.5% back on debit card spend. Rewards can be redeemed as cash, airtime, or vouchers.
- Savings at 7.23% interest per year.
- Borrowing perks — including 31 days of interest-free credit on certain purchases.
The roadmap for 2025 includes additional features like voucher purchases, lotto tickets, DebiCheck approvals, and a Huawei-friendly app. By 2026, OM Bank says it will expand into fixed and notice deposit accounts.
Billions in backing, losses expected
Old Mutual has poured R2.8 billion into building the bank since 2022, and expects a further R1.1–R1.3 billion in losses per year until 2028, when profitability is forecast.
Despite the high cost, analysts believe the move is strategic. With access to Old Mutual’s 3.1 million existing customers, 400,000 Money Account users, and a R20 billion loan book, OM Bank is positioned to scale quickly.
Capitec in the crosshairs
The new bank’s biggest target is clear: Capitec’s mass-market dominance. With over 23 million customers and a valuation that recently overtook FirstRand as the most valuable bank in Africa, Capitec has long been the envy of the industry.
But Old Mutual thinks the timing is right. Its pitch is aimed squarely at upper mass-market and lower affluent earners — those making between R5,000 and R80,000 monthly. This is the very market Capitec thrives in.
A wave of challengers
OM Bank is not entering the ring alone. Several new players are reshaping South Africa’s banking landscape:
- eNL Mutual Bank (formerly YWBN Mutual Bank) — officially launched in August 2025 as South Africa’s first women-owned mutual bank.
- Nedbank’s R1.65 billion iKhokha deal — signalling the Big Four’s race to lock in SME growth.
- The SA Innovative Financial Services Cooperative (SAIFSC) — a state-backed bank for women, youth, and persons with disabilities, awaiting Prudential Authority approval in 2025.
- Postbank — on its way to becoming a fully fledged state-owned retail bank.
For many South Africans, these changes arrive amid a surge in demand for affordable credit options and lower banking fees .
Why this matters
For decades, South Africa’s banking sector was the domain of the “Big Four”: Standard Bank, Nedbank, Absa, and FNB. But the rise of Capitec — and now OM Bank — proves there’s still room for disruption.
If OM Bank can deliver on its promises, South Africans may soon have more choice than ever before — cheaper fees, smarter tools, and banking that feels more personal.
But whether it can truly dethrone Capitec remains the billion-rand question.
For breaking news and in-depth analysis on South Africa’s fast-changing banking industry, visit NOWinSA daily — Stories Shaping South Africa Today.
