Original Research

Fintechs in South Africa: Impact on regulation, incumbents and consumers

Simphiwe K. Cele, Nhlanhla W. Mlitwa
South African Journal of Information Management | Vol 26, No 1 | a1766 | DOI: https://doi.org/10.4102/sajim.v26i1.1766 | © 2024 Simphiwe K. Cele, Nhlanhla W. Mlitwa | This work is licensed under CC Attribution 4.0
Submitted: 11 September 2023 | Published: 14 March 2024

About the author(s)

Simphiwe K. Cele, School of Business Leadership, University of South Africa, Midrand, South Africa
Nhlanhla W. Mlitwa, School of Business Leadership, University of South Africa, Midrand, South Africa


Background: The financial services industry in South Africa has undergone many changes that have given birth to fintechs. Most of these changes are driven by the advent of technology and evolving customer expectations. Fintechs have led to process disruptions and business model transformations, yet their implications have yet to be sufficiently studied. Therefore, it is essential to close this knowledge gap by investigating the impact of fintechs on this industry.

Objectives: This research aimed to investigate the impact of fintechs in the financial services industry in South Africa.

Method: A qualitative study was conducted in which 18 industry experts were interviewed using semi-structured interviews. The interviews were audio-recorded and transcribed for data analysis. ATLAS.ti 22 was used to organise and analyse data.

Results: Fintechs increase competition for the incumbents, reduce profits, expose the inability of the incumbents to be agile and introduce new regulatory risks in the financial services industry. In contrast, fintechs have also brought some positive changes into the industry: financial inclusion, new growth opportunities, increasing choices for consumers and making the industry more competitive, reducing costs, customising financial services, bringing convenience and forcing incumbents and regulators to become more innovative.

Conclusion: This study uncovered the positive and negative effects of fintechs in financial services in South Africa.

Contribution: The study will benefit academia by expanding the body of knowledge about fintech research and improving the holistic understanding of this field in emerging economies, which can inspire future research on fintech and its application.


fintechs; financial technologies; impact; regulatory risk; sandboxes; agility; competition; financial inclusion; growth opportunities; convenience

JEL Codes

D44: Auctions; D53: Financial Markets; F65: Finance; G15: International Financial Markets; G21: Banks • Depository Institutions • Micro Finance Institutions • Mortgages

Sustainable Development Goal

Goal 9: Industry, innovation and infrastructure


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