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I seldom encounter anyone who has a positive word to say about their banks. That’s why it is easy to believe that the market is ripe for competition. With the entry of several new banks — Discovery Bank, TymeBank and Bank Zero — on the horizon, one can imagine they will sweep into the market to solve the frustrations of the typical bank customer. But it is going to be a tough battle. Any new bank faces two major problems: customers stick to the existing banks; and being a profitable bank is not as easy as keeping customers happy. The history of challenger banks in SA illustrates the tribulations. While all three of the new challengers have emphasised that they will be branchless and digitally driven, this is not a new pitch. One only has to think back to icanonline, a joint venture between Mweb and BOE, and 20twenty, which was backed by Saambou, both of which entered the market in the early 2000s. By the middle of that decade they were gone, despite rave reviews from customers. They...

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