AI AND MACHINE LEARNING
At the end of 2025, the Financial Sector Conduct Authority (FSCA) and the Prudential Authority (PA) published a joint survey titled Artificial Intelligence in the South African Financial Sector. The survey provided insight into the micro-prudential and macro-prudential risks AI may pose to the financial sector. In 2026, we expect to see further engagement on the adoption of a regulatory framework for AI, including guidelines for ethical use of AI tools.
PAYMENTS
In 2025, the National Treasury published its Positioning the South African Reserve’s Bank Payments Ecosystem Modernisation Programme: A strategic shift to a higher equilibrium position paper. The paper affirmed the policy goals set out in the National Payment System Framework and Strategy Vision 2025.
To support the regulatory amendments required to implement the PEM Programme, the South African Reserve Bank (SARB) published two draft documents for public comment: the Draft Specific Payment Activities Exemption Notice and the directive in respect of specific payment activities within the national payment system.
We envisage the finalisation of regulatory amendments, enabling greater involvement of non-banks in directly accessing the payment system. The conclusion of the Conduct of Financial Institutions (COFI) Bill is also anticipated to include provisions addressing payment system-related activities.
CRYPTO AND BLOCKCHAIN
At the end of 2025, the FSCA confirmed that 300 crypto asset service provider licenses had been issued, highlighting the rapid growth and maturing of South Africa’s crypto sector. The crypto asset industry is evolving from retail financial services to wholesale financial services.
We expect to see the involvement of more traditional financial institutions providing access to and investment in crypto assets (to the extent permitted by regulation). 2026 will be the year of stablecoins, with a focus on the adoption of stablecoin payments regionally across Africa and globally.
Further regulatory guidance and standards are anticipated, particularly addressing cross-border fund flows and market conduct of crypto asset service providers. The industry anticipates the outcome of the SARB judicial appeal in the Supreme Court of Appeal regarding the applicability of the Exchange Control Regulations to crypto asset transfers in the matter of Standard Bank v South African Reserve Bank.
OPEN FINANCE
The formal adoption of a South African open finance framework by the FSCA is still on the cards. We anticipate seeing the adoption of guidelines regulating the activities of financial institutions and third-party providers. COFI is expected to include provisions dealing with open finance-related activities.
EMBEDDED FINANCE
In its research on buy-now-pay-later (BNPL), the Intergovernmental Fintech Working Group noted that BNPL currently falls into a regulatory void. Regulatory clarity is expected on whether BNPL products fall within the ambit of the National Credit Act (NCA) or the Financial Advisory and Intermediary Services (FAIS) Act.
The National Credit Regulator (NCR) is responsible for compliance with the NCA, while the FSCA is responsible for compliance with the FAIS Act. Further industry engagement by both the NCR and the FSCA is anticipated over the course of 2026.
REGIONAL ENGAGEMENT
Payment regulatory developments are expected to drive increased M&A activity within the industry. Further foreign investment in local players as well as entrants from other international regions entering the South African market is expected in 2026. We predict the creation of more state-owned utility-type entities in the payments space.
In relation to digital assets, partnerships between digital asset providers are likely to grow, as stablecoins gain traction for cross-border payments within the global payments ecosystem. Heightened engagement among regional regulators and supervisory bodies to establish regional rules for fintech entities that operate in multiple jurisdictions across Africa is expected.
