A new paper by the Reserve Bank argues that South Africa's market-driven approach to open banking is limited in its reach.

TechCentral

A South African Reserve Bank working paper argues that the country's market-driven open banking approach, while fostering innovation and financial inclusion, risks entrenching socioeconomic inequalities. The typical open banking user is middle-aged, employed, and educated, leaving out those with low digital literacy or limited technology access. The paper compares South Africa to 15 countries and advocates for a hybrid, regulator-led model with mandatory data-sharing standards, consumer consent protections, API interoperability rules, and public investment in digital literacy. Despite gaps, open banking has shown positive results, with 59% of users being female and near-equal urban/rural splits, though regional disparities persist.

Open banking is growing in South Africa – but not for everyone

Read: Fintechs and crypto shake Africa’s banking foundations

Read: Shoppers forcing merchants to adopt new digital payment methods