Michael Jordaan, the former chief of First National Bank, is considering partnerships to grow Bank Zero as the app-driven firm seeks to challenge the country’s biggest finance institutions.
Launched in 2021, the digital bank is set to break even within two years and has received interest in forming strategic linkups from a large insurer, a telecommunications company and a payments firm.
“The next step is to scale up and it could just be that we do it in partnership,” Jordaan, Bank Zero’s co-founder and chairman, said in an interview in Stellenbosch, the location of his family’s wine estate, Bartinney.
His new venture is among a handful of lenders encroaching on a space dominated by South Africa’s big five financial institutions. Unlike unicorn Tyme, which billionaire Patrice Motsepe backs, or the bank set up by top health insurance administrator Discovery, it’s fully funded by its six founders who have yet to pay themselves.
While Bank Zero’s bigger rivals have invested billions of rand in their offerings, the new lender has a fraction of that, meaning it will reach profitability with “fewer customers and less risk”, Jordaan said. Its small user base is growing by about 50% year on year and is set to reach 100 000 by 2027, he said.
Jordaan’s second act in banking wasn’t deliberate or intended.
After about a decade at the helm of First National Bank, during which time he helped South Africa’s oldest lender win an award for being the world’s most innovative bank in 2012, he retired at 46 and moved to Bartinney full time in 2014.
“The lifestyle that comes with a wine farm is a dream, but commercially it makes no sense to grow grapes,” he said. “Of course, drinking the product does.”
No-fee bank
It was over bottles of red wine that Jordaan and Yatin Narsai, who was FNB’s chief information officer and is Bank Zero’s chief executive, talked about how they might approach banking differently if given a second chance, without some of the constraints established institutions face. They decided to build a no-fee bank.
While South Africa has a world-class banking system, lenders’ high charges are no longer justifiable given how technology has evolved, according to Jordaan. Fee income accounts for a third of bank revenue, a World Bank assessment of the country’s financial sector shows.
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“People think banks need to have fees to make money but we’re absolutely capable of running a profitable bank without any fees,” he said. Bank Zero keeps its cost structure low and makes its money on the difference between wholesale and retail interest rates, he said.
About 20% of the bank’s customer base comprises businesses and it has a growing stream of high-net-worth individual clients. While Jordaan was “surprised by the number of big names”, he thinks they’re signing up to take advantage of Bank Zero’s offering to build and change payments authorisation chains within minutes via its app — a feature its business banking rivals lack — and its track record of zero card fraud.
While few bankers would make such a bold claim, Bank Zero’s patented security features mean none of its customers has suffered card fraud despite attempts, he said. His own card features a picture of himself with a personal message — be kind.
Jordaan also runs venture capital firm Montegray Capital, whose partners include cryptocurrency exchange VALR and Purple Group, the company behind investment platform EasyEquities. While Montegray is fully invested, he continues to seek opportunities through other ventures.
“I’m at the stage in life that I’ll remain in forever,” he said. “I’m always working and I’m always on holiday.” — (c) 2025 Bloomberg LP
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