Regulation in Focus – Preparing for 2026: What South Africa’s Evolving Regulatory Environment Means for Business

If you are a sports fanatic, the road to 2026 has been exciting (or maybe disappointing?) as national teams qualified for this year’s FIFA World Cup in North America. What may be less exciting than the FIFA World Cup, is the prospect of dealing with regulatory changes in 2026. As with the start of every new year there are a few items that we must keep on our radar when it comes to compliance.

Gearing towards implementation of the Conduct of Financial Institutions ( “CoFI“) Bill

The CoFI Bill has been on the financial services industry’s radar for a while now. According to the Financial Sector Conduct Authority’s (FSCA) three-year Regulation Plan (1 April 2025 – 31 March 2028), the FSCA will continue to support National Treasury in finalising the bill.¹ In the interim several cross-sector projects are underway to ease entities into the transition into CoFI. The CoFI Bill moves the industry from a rules-based to a principles-based approach, and these projects aim to support that outcome.

Financial Services Providers should also keep an eye out for the roll out of the Omni-Risk Return which will form the foundation of the Integrated Regulatory System, the new reg-tech to be used by the FSCA to enhance its regulatory capabilities.

Oversight of Artificial Intelligence (AI)

Towards the end of 2025 the FSCA and the Prudential Authority (PA) released a report regarding the use of AI in the South African financial sector.² The purpose of the report was to determine how AI is adopted in the financial sector and looked at related topics such as risks and benefits of using AI and consumer protection issues. The report points out that certain measures already exist in current legislation, such as Section 71 in the Protection of Personal Information Act (POPIA) that deals with automated decision-making.

Adoption of AI is however not only driven by improved customer experience and can hold certain risks. The FSCA and PA intend to follow up this report with a discussion paper and will engage with stakeholders regarding this.

Review of the National Payment System Act 78 of 1998

A 2023 report from the South African Reserve Bank (SARB) indicates that cash is still king and in terms of volumes account for 56% of all payments.³ This is despite the rise in digital payments and the adoption of cryptocurrency as a payment method. It is therefore no wonder that one of the goals the SARB has set for itself is financial inclusion.⁴

To boost access to the formal financial system and the other goals set by the SARB, the national payment system is set for an overhaul in the coming year. Changes to the current system are also necessitated by rapid developments and innovation in this arena.

The FSCA in conjunction with the SARB’s National Payment System Department is also aiming at establishing a new conduct framework through the Conduct Standard – Requirements for Payment System Service Providers.

Enforcement

On a broader scale the following changes may influence a larger business community:

1. 1. 1. The Information Regulator (IR) is working towards amending POPIA to expand its powers. The regulator wants to be able to issue fines instantly after a non-compliance has occurred and not only once an enforcement notice has been issued. The regulator hopes that this will curb data breaches. A total of 2 374 security compromises were reported to the IR in the 2024/25 financial year. The regulator has expressed its concern about this statistic
      2. According to the Financial Action Task Force’s website, the next mutual evaluation of South Africa can possibly be conducted in February 2027, but according to National Treasury can commence as early as the middle of this year. A different assessment methodology than the one used in 2019 will be applied.⁵ The Financial Intelligence Centre and the other supervisory bodies will therefore continue to take a strict stance around compliance. This is evident from the recent fine of R3 million that the PA handed to Discovery Bank for not complying with certain obligations in terms of the Financial Intelligence Centre Act (FICA). Certain amendments to FICA are also currently in the draft stage.

    

Whatever goals you have set for yourself in 2026, make sure that they include compliance. What compliance challenges will you be facing this year? Reach out to Marianne Mokken at
021 819 7813 or mmokken@wauko.com if you want to share.

Sources

1. The FSCA website is currently being updated and no link to the original document can be provided at this point.
2. FSCA, SARB (2025) Artificial Intelligence in the South African Financial Sector. Pretoria: FSCA and PAThe FSCA website is currently being updated and no link to the original document can be provided at this point.
3. SARB (2023) Payment Study Report: Executive Summary. Pretoria: National Payment System Department.
4. SARB (2025) National Payment System Framework and Strategy: Vision 2025. Pretoria: National Payment System Department.
5. https://www.treasury.gov.za/comm_media/press/2026/2026011501%20Media%20Statement%20-%20General%20Laws%20Amendment%20Bill.pdf