If SA’s new banks behave anything like UK banking start-ups they will face an uphill battle. Like SA, the UK has its own "big four" — Barclays, Lloyds Banking Group, HSBC and Royal Bank of Scotland — and has welcomed a flurry of new entrants to its banking sector over the last few years. In fact, many more new entrants than in SA, thanks largely to regulatory changes that have relaxed capital requirements for banks. One such challenger bank, Monzo, was granted a full banking licence by the UK’s Financial Conduct Authority in April 2017. Despite already boasting more than one-million customers and processing £1bn in payments each month, Monzo’s losses more than quadrupled in the 12 months to February, to £33.1m. The trouble is that Monzo’s cost per account, although rapidly falling, is still too high. Since most customers don’t yet deposit salaries into their Monzo accounts, the average deposit per customer is very low. Consider that Discovery Bank will target the two-million odd Vit...

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