New Digital Bank OM Bank Surpasses 140 000 Customers Before Official Launch, Targeting Capitec's Market

OM Bank, the digital banking venture of financial services giant Old Mutual, has already attracted over 140 000 customers just three months after its soft launch in South Africa. The bank is onboarding approximately 5 000 new clients daily, signalling strong early traction as it prepares to take on established competitors like Capitec in the "middle mass market" — South Africans earning between R5 000 and R80 000 per month.

The bank's rapid early adoption is underpinned by its integration with Old Mutual's extensive existing ecosystem. With 346 physical branches and a 2 000-strong salesforce handling over 3.4 million annual visits, OM Bank benefits from immediate access to a vast distribution channel without the capital expenditure typically required to build a branch network. This hybrid model combines digital banking with physical touchpoints, enabling seamless onboarding and cross-selling products.

Chief product and innovation officer Pauline Molloyi emphasised the bank's focus on simplicity, transparency, and friction reduction — a proposition clearly resonating with early adopters. The target clientele largely overlaps with Old Mutual's Mass and Foundation insurance cluster, where the insurer holds a dominant market position, offering a built-in conversion opportunity at minimal acquisition cost.

The bank is central to Old Mutual's strategy of becoming an integrated financial services provider. While the insurer has already invested over R4 billion in the venture and expects operating losses of R1.1 billion to R1.3 billion over the next three years, the long-term vision extends beyond standalone profitability. A banking app provides a stickier customer engagement channel than insurance products, creating a valuable recurring touchpoint and reinforcing the broader ecosystem.

Old Mutual projects OM Bank will require approximately 2.8 million clients to reach break-even. This target includes converting 500 000 existing Money Account clients, attracting one million existing Old Mutual customers, and bringing 1.1 million entirely new clients into the group's ecosystem. Achieving this within three years would require a growth rate roughly matching Capitec's recent expansion pace.

Market Sentiment:

The sentiment is cautiously optimistic with a recognition of significant execution challenges. OM Bank's early traction — 140 000 customers in three months with minimal marketing — validates the core thesis that Old Mutual's existing customer base provides a powerful, low-cost acquisition channel. The insurer's physical footprint, combined with a digital offering, creates a differentiated hybrid model that could resonate with South Africans seeking both convenience and trusted touchpoints. However, the path to profitability is steep: reaching 2.8 million clients within three years requires sustained aggressive growth, and the projected R1.1 billion-plus annual losses underscore the capital intensity of banking. The relatively low assumed penetration of existing Old Mutual clients (only one million out of seven million in the target cluster) suggests management recognises the difficulty of conversion. The true test will come when OM Bank moves beyond the captive Old Mutual ecosystem into open competition with Capitec, FNB, and others. For now, the early numbers are promising, but the market will be watching whether this strong start translates into sustainable scale and, ultimately, profitability.

Disclaimer:

This content has been generated using AI technology and is intended for informational purposes only. While efforts have been made to ensure accuracy and relevance, this text should not be considered professional advice or an official statement. Always verify information from authoritative sources before making any decisions. This is not financial advice.