OM Bank Launches: Old Mutual’s Digital Bank Challenges Capitec

South Africa’s banking sector is facing fresh disruption with the launch of OM Bank, Old Mutual’s new digital-first bank designed to take on established players like Capitec. The move positions Old Mutual to capture a fast-growing customer base in the upper mass and lower affluent segments, individuals earning between R5,000 and R80,000 a month.

With a mobile-first rollout and a strong focus on user convenience, OM Bank signals Old Mutual’s ambition to modernize how South Africans manage their money.

A Phased Rollout Strategy

OM Bank’s launch is being carefully staged. The first wave of users includes Old Mutual Money Account holders and individuals who pre-registered their interest when the OM Bank mobile app was introduced earlier this year. Employees of Old Mutual have been testing the app since April 2025, ironing out early kinks before the wider rollout.

A full public launch is expected in the last quarter of 2025. Until then, Money Account users can keep transacting, but by the end of 2026, these accounts will be phased out. Customers will then need to migrate to OM Bank or consider other banking alternatives.

Digital-First Banking Features

At its core, OM Bank is designed for digital natives and tech-savvy customers who seek a more engaging banking experience. Key features include:

Quick Mobile Sign-Up – Open an account in minutes, no paperwork required.
My Mobile Banker – A built-in financial assistant that helps users track spending, set goals, budget, and receive smart alerts.
OM Bank Rewards – Earn 10% in points on credit card purchases and 2.5% on debit card spend. Rewards can be redeemed for cash, airtime, or vouchers.
Competitive Savings – Savings accounts offer up to 7.23% per year in interest.
Flexible Borrowing – 31 days of interest-free credit on qualifying transactions, plus flexible repayment options.

This balance of rewards, savings, and digital tools makes OM Bank a formidable alternative to Capitec, especially for customers seeking more than just low fees.

Investment and Long-Term Vision

Old Mutual has already committed R2.8 billion between 2022 and 2024 to launch OM Bank, with additional operational losses of R1.1–R1.3 billion projected until 2028, when the bank expects to break even.

The roadmap is ambitious. Planned 2025 features include the ability to buy vouchers and lottery tickets, and DebiCheck debit order approvals. A Huawei-specific app is also in development. Looking ahead to 2026, OM Bank plans to expand into fixed and notice deposit accounts, further deepening its savings and lending offering.

By leveraging its 3.1 million low-income customers, 400,000 Money Account users, and a R20 billion loan book, Old Mutual believes it can accelerate adoption and carve out space in South Africa’s increasingly competitive digital banking market.

Transparent, Low-Cost Fees

OM Bank’s fee structure is positioned to be one of the most competitive in the market:

R4.95 monthly account fee
Free digital payments (RTC & RPP/Payshap) and EFTs for transactions under R3,000

This approach aligns with Capitec’s low-cost model, but OM Bank’s additional rewards program and higher savings rates could provide an edge.

Can OM Bank Really Challenge Capitec?

Capitec has long dominated South Africa’s mass-market banking space, thanks to its affordability and simplicity. But OM Bank brings something new: a blend of digital-first design, rich financial tools, and customer rewards.

With billions invested, an aggressive feature roadmap, and Old Mutual’s legacy behind it, OM Bank could become the most credible challenger to Capitec in years. The next few quarters will reveal whether customers are ready to switch and whether Capitec’s dominance can finally be tested.

Blockrora Take: OM Bank isn’t just another bank launch; it’s a digital challenge to one of South Africa’s most trusted financial brands. If executed well, it could redefine how South Africans save, spend, and borrow in a rapidly digitalizing economy.