banking

Digital banks: game-changers in South Africa’s banking industry?

Digital banks: game-changers in South Africa’s banking industry?

In 2017, the South African Reserve Bank issued three new banking licences to Discovery, Bank Zero and TymeDigital. These are the first licences issued to new banks in more than a decade since the issuing of a bank licence to Finbond Mutual bank in 2001. In the State of the Nation address in 2018, the South African president hailed this as an opportunity to ensure competitive rivalry in a highly concentrated sector. However, the potential for entrants to bring disruptive competition with substantial benefits to consumers needs to be assessed in the context of challenges in the banking industry in South Africa.

An overview of the prominent barriers to entry in South Africa’s retail banking industry

An overview of the prominent barriers to entry in South Africa’s retail banking industry

Nicholas Nhundu

The South African retail banking sector remains highly concentrated with six large banks accounting for more than 90 percent of retail deposits; namely, Standard Bank, Absa, First National Bank, Nedbank, Capitec and Investec.