Open banking significantly reduces unbanked individuals in South Africa
A South African Reserve Bank working paper finds that open banking significantly reduces the number of unbanked individuals and increases the use of credit, saving, and insurance services. The study, published March 16, 2026, used individual-level survey data from 2023.
Targeted platforms, wider financial access
The study, using individual-level survey data for 2023, reveals that open banking significantly reduces the number of unbanked individuals in South Africa. It also improves bank transaction frequency and increases the use of credit, saving, and insurance services.
The positive effect is even greater when open banking platforms are specifically targeted, for instance, towards credit products.
This targeted approach demonstrates a spillover effect, extending benefits to non-targeted categories such as savings products.
These findings provide empirical evidence that open banking serves as a viable alternative to enhance participation in the financial sector, moving beyond merely holding a traditional bank account.
The research underscores open banking's potential to integrate more people into the formal financial system, fostering broader economic engagement and access to essential services for previously underserved populations.
This mechanism leverages information sharing to overcome traditional barriers to financial inclusion, creating new opportunities for startups and fintechs to disrupt established finance models.
Open banking's global rise and local potential
Open banking enables banks to share customer-permissioned transaction and account data with third-party providers via application programming interfaces (APIs).
This model fosters transparency for account holders and creates new opportunities for product marketing and cross-selling.
Globally, open banking has seen increased adoption since its UK launch in 2018, with 95 jurisdictions now having some form of implementation.
South Africa, with its well-developed financial sector and high digital engagement (74.7 percent internet penetration, 195.4 percent mobile connections), presents fertile ground for open banking to accelerate financial inclusion.
This study addresses a critical research gap by examining open banking's effects in emerging economies, particularly its interplay with mobile technology, which is crucial for advancing financial services access for low-income populations.
A double-edged digital sword
While open banking offers significant promise for financial inclusion, the study cautions that improperly targeted platforms could exacerbate banking exclusion.
This risk highlights the critical need for policymakers to design comprehensive strategies that enhance digital literacy among users.
Simultaneously, robust regulatory frameworks are essential to mitigate risks related to consumer data and ensure equitable access to financial products beyond traditional institutions.