How AI could unlock financial services for millions of South Africans?

South Africa has one of Africa’s most sophisticated financial economies, yet a troubling reality persists beneath the fintech shine. Around 11 million adults remain disconnected from reliable credit, savings options, or formal banking, according to University of Stellenbosch Business School research. Meanwhile, mobile phone ownership has reached 92% across the country.

This contrast presents a compelling opportunity: where brick-and-mortar banking infrastructure has fallen short, digital technology might succeed. We’re already seeing AI-powered tools make headway in financial inclusion across emerging markets. Take the Middle East, where mobile AI platforms now connect people with microloans and help them navigate financial services digitally. Could South Africa follow suit?

Breaking new ground with AI and alternative data

McKinsey & Company research points to an exciting possibility: AI systems that can independently assess creditworthiness and negotiate loan terms on the spot. What makes this approach revolutionary is how these systems can evaluate non-traditional financial indicators-mobile payment patterns, airtime usage, and informal saving habits-where conventional credit scoring models don’t work.

“AI has the potential to fundamentally reshape lending models,” explains Tertius De Bruin, Consultant at Johannesburg-based fintech consultancy Elenjical. “It can bring visibility to communities and individuals who have historically been left out of formal finance-not because of risk, but because of limited data.”

This capability could transform lives - from small business owners in Khayelitsha township to farmers in rural Limpopo - without the barriers of physical bank visits or complicated paperwork.

AI’s impact extends beyond lending. It can make financial information more accessible, deliver personalised financial education, and help develop digital products suited to local realities-where smartphone access is common but financial literacy often isn’t.

“There’s a growing awareness that AI needs to be both powerful and responsible,” De Bruin notes. “Especially in a country like South Africa, where financial systems carry a legacy of exclusion. The technology must adapt to the people-not the other way around.”

Homegrown innovation with global potential

The South African fintech sector is buzzing with activity. Companies like Elenjical are putting AI at the heart of their development strategy. Known for their expertise in capital markets technology and integration with platforms like Murex, they’re investing in AI solutions built for financial institutions.

While Elenjical has already developed AI tools, they’re now focusing on practical, market-ready applications. Their AI-assisted SQL query tool helps developers create more efficient statements, whilst their AI log querying assistant interprets system logs and suggest fixes based on technical documentation-particularly valuable in complex banking environments.

“These aren’t speculative R&D projects,” De Bruin emphasises. “They’re aimed at solving real-world pain points for our clients and improving the efficiency of our own teams. We’re combining local understanding with world-class capability.”

Banking the unbanked-a distinctly African approach

Financial exclusion won’t disappear overnight, but the way forward is becoming clearer. Picture a pilot programme where AI agents underwrite microloans for thousands of previously unbanked South Africans. By monitoring repayment patterns over time, these initiatives could build new trust models between lenders and borrowers-without depending on traditional financial histories.

Those outside the banking system don’t need charity-they need tools that recognise their unique circumstances, engage them meaningfully, and work for them. AI, designed thoughtfully and expertly, can deliver exactly that. Combined with deep industry knowledge-as in Elenjical’s specialised innovations-it becomes more than technology. It becomes essential infrastructure.

“We’re at a pivotal moment,” says De Bruin. “South Africa’s fintech ecosystem is bursting with talent and ideas. The challenge now is to turn that potential into measurable impact-for the entrepreneur in Soweto, the smallholder in the Eastern Cape, or the student in Durban building credit for the first time.”

AI’s promise here isn’t replacing people, it’s reaching the people the current system leaves out, and closing a gap that should never have existed in the first place.

Article originally published Top Africa News