Three South African Digital Banks are betting on data analytics and aggressive pricing for attracting the tech-savvy and price-concerned consumers, triggering a rare challenge for the old-horses in the South African Banking system.
Since the early 2000s, this might have been the first time, this $30 billion-worth industry would be facing competitions, when a small bank, Capitee Bank, bolstered into a sector dominated by the FirstRand, Absa, Standard Bank and Absa.
However, that time has been long gone and this market remained unrivalled over the past couple of decades. As of now, markets are chattering about banking sector’s newcomers, Discovery Bank, Bank Zero and TymeBank, they all are expected to produce a tough fight for the older financial institutes in South Africa.
As the very first move, these three banks are expected to lower the cost-to-income ratio substantially, while they would be offering cheaper prices than the big five lenders of South African banking sectors, putting a fight in the pricing of retail banking products in South Africa.
“We are here to shake up the status quo. Much the same as Uber did in the taxi industry,” the Chief executive of TymeBank, a financial technology company controlled by the SA Business Tycoon, Patrice Motsepe, said on 3rd December.
While the newcomers are focusing on the South African banking industry, the Bank Zero stated that they might be looking for other emerging market, and as they have strong IT platforms, the newcomers have better chance of survival and expansions.