Digital promise, rural reality: SA's digital banking revolution reflects innovation and inequality

Mail & Guardian

15-05-2025

The architecture of banking in Africa has long mirrored broader economic and political patterns — from indigenous exchange systems to colonial capitalism.
The architecture of banking in Africa has long mirrored broader economic and political patterns — from indigenous exchange systems to colonial capitalism.
In South Africa, banking developed in line with British institutions, prioritising urban elites and marginalising rural communities. Today, while South Africa's banking infrastructure increasingly resembles global systems, the evolution of
South African banks were early movers in mobile banking innovation, a space where African entrepreneurs have set global precedents. Yet customer inclusion in these systems only began to deepen when macroeconomic policy shifted in the late 20th century to support broader entrepreneurial participation. The emergence of the
Despite numerous studies on mobile banking and consumer trends, such as
When banking was introduced during South Africa's colonial period, institutions like the Eastern Province Bank (1838) were designed to serve the urban elite, excluding rural communities who relied on informal financial practices based on trust and communal exchange. The establishment of the South African Reserve Bank in 1921, and the local money market in 1925, aimed to reduce financial dependence on London but, by then, the system had already ossified into an oligopoly that favoured a select few.
This exclusion created
Digital banking is often promoted as a panacea for inclusion but the reality is more complex. Digital literacy in rural communities remains low and
Adoption of financial technologies is shaped by two key determinants: perceived cost and
For many South Africans, especially those in under-resourced areas, the hidden costs of fintech — data usage, smartphone access and travel to network zones — are prohibitively high. This economic reality is often overlooked in national strategies that promote digitisation without addressing affordability.
In parallel, trust in financial institutions remains fragile. High-profile scandals like the collapse of VBS Mutual Bank have devastated rural municipalities and eroded public faith in financial systems. Consequently, digital-only banks are met with justified scepticism.
A study by the Reserve Bank highlights that trust influences customer satisfaction more than any other factor. Where trust is low, customers are reluctant to use digital tools, regardless of their availability or utility.
The digital divide is not solely about infrastructure — it encompasses access, digital skills and usability. While fintech firms and mobile network operators have introduced innovative services, rural communities continue to be marginalised due to
The Technology Acceptance Model, developed by Fred Davis, suggests that adoption depends on user attitudes shaped by perceived usefulness and ease of use. In rural contexts, both of these are constrained. Without targeted interventions, 4IR could widen existing gaps rather than bridge them.
To build an inclusive digital financial system, banks must shift from urban-centric design to contextual innovation that addresses rural realities. For instance,
There is a need for
The Reserve Bank and other institutions should invest in digital literacy initiatives that are localised and culturally grounded. Community champions, radio programmes and multi-lingual mobile content can improve understanding and trust in digital platforms.
A blend of digital and face-to-face services is essential. Mobile banking vans, community banking agents and public wi-fi hubs could provide transitional access to digital services.
The government and private stakeholders must subsidise infrastructure development in rural areas, including solar-powered connectivity and affordable smartphones.
As more people go digital, robust mechanisms must be in place to protect users from fraud, ensure data privacy and offer redress — especially in areas where legal
The promise of 4IR in South Africa's financial sector lies not in copying global models but in creating innovative, adaptive systems that reflect local needs. If the banking system is to be truly inclusive, it must be built from the margins inward — not the other way around.
Only by confronting historical legacies, socio-cultural realities and infrastructural inequalities can South Africa create a financial future where no community is left behind.
Nomzamo Netshivhale is a research associate with the 4IR and Digital Policy Research Unit at the University of Johannesburg. Her work focuses on financial technology and the impact of the Fourth Industrial Revolution on banking systems in South Africa.