Mobile-first banks are reshaping retail banking in Africa and the Middle East, pressuring traditional institutions to restructure fees while offering customers more flexible, lower-cost account options.
Digital banking is accelerating structural changes in retail banking across Africa and the Middle East. Traditional institutions are reassessing pricing models, minimum balance requirements and customer segmentation strategies as digital-first competitors gain market share.
Pricing frameworks are shifting away from fixed account fees towards more dynamic, usage-based models. High mobile penetration, a young population and increasing demand for accessible financial services are driving this transformation.
Digital-first providers benefit from lower infrastructure costs, enabling simplified pricing structures and reduced barriers to entry for customers.
Conventional banks react to online competition
In Africa, established institutions such as Standard Bank, Absa Group and FirstRand are expanding digital capabilities to compete with mobile-driven platforms like M-Pesa and TymeBank. These platforms have demonstrated that large-scale customer acquisition is possible without an extensive physical branch network.
In the Middle East, banks including Emirates NBD, First Abu Dhabi Bank and Saudi National Bank are investing heavily in digital subsidiaries and app-based banking models. Initiatives such as Liv, developed by Emirates NBD, target digitally active retail customers with simplified onboarding and lower-cost services.
Bank executives have recognised the strategic importance of digital transformation. Industry leaders emphasise that digital banking will play a central role in the future of retail banking as customer expectations shift towards real-time services and cost efficiency.
Fee structures are becoming more disaggregated
Traditional banks are not eliminating fees but are redesigning them based on customer behaviour and account activity. Customers maintaining higher balances or receiving regular salary deposits are more likely to qualify for fee waivers, while lower-balance accounts may incur monthly charges.
Digital banks typically offer accounts with no minimum balance requirements and minimal or zero monthly fees. These providers generate revenue through alternative channels such as payment processing fees, lending products and premium subscription services.
This shift has created a more fragmented retail banking landscape, where pricing is increasingly linked to customer usage patterns rather than standardised fee structures.
Implications for retail customers
Retail customers now have access to a broader range of banking options. Digital banks provide low-cost entry points and simplified account structures, which are particularly beneficial for younger users and underbanked populations.
However, traditional banks continue to offer a wider range of services, including credit facilities, wealth management and international banking capabilities, which are not always fully replicated by digital-only providers.
Customers must evaluate not only pricing but also service scope, reliability and long-term financial requirements when selecting a banking provider.
Digital banks reduce entry costs while traditional banks restructure fee models
Figure 1. Retail banking fee models in Africa and the Middle East in 2026
| Model | Minimum balance requirement | Fee structure | Representative institutions |
|---|---|---|---|
| Traditional banks | Moderate to high | Fees waived with balance or salary conditions | Emirates NBD, First Abu Dhabi Bank, Standard Bank |
| Digital banks | None | Low or zero monthly fees | Liv., TymeBank, M-Pesa |
| Hybrid models | Conditional | Mixed fee structures | Absa Group, FirstRand |
Source: BankQuality
Regulatory and broader market implications
Regulators across Africa and the Middle East are promoting digital financial inclusion while maintaining regulatory oversight. Central banks in the UAE and Saudi Arabia, along with regulatory authorities in major African markets, are encouraging innovation alongside improved access to financial services without compromising financial stability.
Competition between traditional banks and digital providers is intensifying, leading to continued adjustments in fee structures and service models as institutions respond to evolving customer expectations and technological advancements.
In 2026, retail banking in these regions is no longer defined by uniform pricing structures. Instead, it is shaped by digital adoption, competitive dynamics and the ability of banks to align pricing with customer behaviour and usage patterns.