Old Mutual’s OM Bank to Convert 400,000 Money Account Customers in Strategic Rollout

Old Mutual is preparing to transition its 400,000 active Money Account customers into clients for its newly established OM Bank, marking a key phase in its banking expansion strategy.

OM Bank Launch Timeline and Regulatory Approval

The bank is scheduled for a public launch before the end of 2025, following successful regulatory compliance. Currently, OM Bank is in a trial phase with 600 Old Mutual employees.

In March 2025, the Prudential Authority granted OM Bank its banking license and approved the appointments of its CEO and board of directors.

Since 2022, Old Mutual has invested R2.8 billion in developing the bank and securing its retail banking license. The insurer anticipates annual losses between R1.1 billion and R1.3 billion initially, projecting breakeven by 2028.

Strategic Customer Conversion Plan

Old Mutual’s existing Money Account (administered by Bidvest Bank) serves as a strategic advantage, with plans to migrate its 400,000 active users and R16 billion lending book to OM Bank.

Outgoing CEO Iain Williamson emphasized converting the Money Account’s 1 million customers (with 400,000 active users) as a priority. The bank will subsequently target Old Mutual’s Mass and Foundation Cluster – middle-income earners (R5,000-R80,000 monthly) traditionally served by Capitec.

Integrated Financial Services Vision

OM Bank represents the final component of Old Mutual’s integrated financial services model, following South Africa’s successful bancassurance approach.

“We’ve committed to integrated financial services, presenting as a one-stop shop with comprehensive solutions,” Williamson stated, noting his satisfaction with the established framework before his August retirement.

The strategy includes Old Mutual Connect, the company’s MVNO, and leverages the banking app to cross-sell insurance products more effectively than traditional insurance apps.

Defensive Move Against Capitec

Analysts suggest OM Bank primarily serves to protect Old Mutual’s insurance business, particularly against Capitec, which has captured 36% of funeral insurance sales through its banking app.

Matthew Pouncett of Laurium Capital explained: “OM Bank enhances Old Mutual’s distribution channels for insurance products while providing valuable customer transaction data for personalized offerings.”

While the full banking offering remains undisclosed, many view this as a defensive strategy to safeguard Old Mutual’s lucrative funeral insurance segment.

This article was first published by Daily Investor and is republished with permission. Original source: MyBroadband