Old Mutual plans to call the new bank OM Bank.
Gallo Image/Charles Gallo
The Prudential Authority (PA), the financial regulator under the SA Reserve Bank (SARB), has given Old Mutual initial approval to set up a bank.
The banking regulator has approved Old Mutual's application for a Section 16 bank charter, subject to certain conditions. Old Mutual plans to call in new lender OM Bank, which completed building its infrastructure and digital platform late last year.
Ian Williamson, CEO of Old Mutual, said: “We are delighted to have received regulatory approval and look forward to transforming the financial services sector with new innovations and solutions. I can confirm that the launch is progressing smoothly.” Friday's statement.
The next steps in OM Bank's evolution include integration testing and connection to South Africa's national payments system. OM Bank's integration into clearinghouses follows a regulated process according to prevailing industry standards.
Mr Williamson told News24 in March that Old Mutual had already spent R1.75 billion building out its core banking system, and that OM Bank's plans for OM Bank's development ahead of its planned public launch by the end of 2024. He said a further R800-million has been pledged to continue the build-out.
OM Bank will target South Africa's mass banking market, dominated by Capitec, which has more than 21 million customers.
Mr Williamson's comments to News24 in March indicated that Old Mutual plans to attract banking customers first from the 3.1 million customers it serves through its Mass and Foundation business cluster. . Old Mutual's Mass and Foundation Business Cluster serves low and lower middle income earners who typically earn between R1,000 and R30,000 a month.
These customers include office workers such as police officers, teachers and nurses, and are served through a wide range of products, from life and funeral insurance to savings and loan products. Williamson described such customers as the company's “center of gravity” to target.
Mr Williamson said: “Approval to establish the bank confirms our progress in building an integrated financial services business for the future.”
