South Africa’s Financial Sector Conduct Authority (FSCA) has published its new Regulatory Strategy for 2025–2028 — offering a glimpse into the minds of the country’s financial watchdogs as they try to stay two steps ahead of a fintech industry that seems determined to sprint rather than walk.

For fintechs hoping to fly under the radar, the message is simple: those days are over.

Since its reincarnation from the Financial Services Board in 2018, the FSCA has been trying to prove that it is more than just a rebadged regulator with a longer name. Its latest strategy makes it clear that, going forward, fintech companies will be squarely in its line of sight — whether they like it or not.

At the heart of this new three-year regulatory vision is a blunt recognition: technology, for all its promises of inclusion and efficiency, has also brought new risks, unintended consequences, and regulatory headaches. And the FSCA, having once been a bit late to the fintech party, is now arriving armed — with software, legislation, and, apparently, a sharpened mandate.

From COVID Recovery to COFI Readiness

The FSCA’s first strategic cycle (2018–2021) was nearly swallowed whole by the COVID-19 pandemic, while its second (2021–2025) was a study in survival and reorientation. Now, the 2025–2028 plan sets its sights on shaping the future of financial conduct, powered by a cocktail of legislation, supervisory technology, and what it calls “responsible innovation.”

At the centre of this effort is the long-anticipated Conduct of Financial Institutions (COFI) Bill, which promises to do for market conduct what South Africa’s prudential regime did for capital adequacy. The Bill, once passed, will consolidate and rationalise a sprawl of fragmented financial conduct laws into one streamlined framework. The FSCA is already preparing to adapt its licensing and supervisory systems to accommodate new actors — including those fintechs currently skating in legal grey zones.

Translation: if your business model is based on the hope that the FSCA hasn’t noticed you yet, that window is closing fast.

The Digital Awakening of a Regulator

The FSCA is also entering its software era. Having acquired a new suptech platform — the Integrated Regulatory Solution (IRS) — the regulator is now betting big on data and automation. The IRS promises to bring order to the chaos by enabling smarter licensing, more timely enforcement, and — perhaps most ambitiously — real-time supervision.

The IRS may not quite match the Silicon Valley ethos of “move fast and break things,” but it does mark a shift from spreadsheets and PDFs to dashboards and APIs. In theory, it could help the FSCA keep pace with the tempo of fintech innovation. In practice, this will depend on whether the regulator can use the tech effectively and whether the sector buys into its promise of “streamlined” compliance. There’s reason to hope — but also to hedge bets.

The FSCA has also laid out its intention to take on more emerging sectors, such as crypto assets and open finance, while implementing its Sustainable Finance Roadmap, a nod to the ESG wave washing over global regulation. It’s a sprawling portfolio — and one that may require the FSCA to become as agile as the fintechs it seeks to supervise.

A New Conduct Era, With Familiar Rhetoric

To its credit, the FSCA does not pretend that regulation alone can solve systemic inequality, but its language is heavy with moral undertones. The watchwords remain fairness, resilience, and inclusion. What this means in practice is an ongoing focus on “treating customers fairly” (a mantra now older than some startup founders) and “empowering households and small businesses.”

This aspiration is commendable, though it sometimes borders on the utopian. Regulators want fintechs to be both scalable and socially responsible, efficient and ethical, profitable and inclusive. Many startups, especially those fighting for survival in a high-cost, low-margin environment, may find that balancing act difficult.

Still, the FSCA is not entirely unsympathetic to the pressures of innovation. The regulator’s tone toward fintechs has softened over the years — from suspicion to cautious engagement, and now, a sort of bureaucratic embrace. Fintechs are no longer insurgents; they are stakeholders. But they must play by the rules — or help write new ones.

Partnership or Paper Tiger?

One unresolved tension is whether the FSCA can truly partner with the sector it polices. The document pledges “transparent and ongoing engagement” with financial players, including fintechs, but how this will translate beyond town hall webinars and public comment periods remains unclear.

More optimistically, the FSCA does seem aware that overregulation could stifle innovation, especially among smaller players. There’s an implicit recognition that the regulator must evolve alongside the industry — not stand in its way. Whether it can do so without expanding its bureaucracy or slowing the pace of reform remains to be seen.

What to Expect Between Now and 2028

If you are a fintech founder, expect the following between now and 2028:

• New Licensing Regimes: Especially under the COFI Bill. If you’re not licensed already, you will be soon — or you’ll be asked to explain why.
• More Data Requests: The IRS will enable the FSCA to demand better, faster, more granular information. Prepare your compliance teams accordingly.
• Crypto and Open Finance Frameworks: These will move from draft guidance to hard rules.
• ESG Pressure: Fintechs may soon have to demonstrate not just financial soundness, but environmental and social credentials too.
• Greater Inter-agency Coordination: The FSCA will work more closely with the Prudential Authority and other bodies. Expect more consistent — but perhaps more demanding — oversight.

Final Thought

South Africa’s financial regulators are no longer merely catching up to fintechs — they are trying to outpace them. The FSCA’s latest strategy reads like a declaration: it is no longer enough for fintechs to be disruptive, customer-centric, or mission-driven. They must also be compliant, transparent, and aligned with the country’s broader economic goals.

To fintechs, the message is clear: the era of “ask forgiveness, not permission” may be coming to a close. The FSCA isn’t slamming the door shut — but it is installing a camera above it.

Download the strategy HERE