Vuyokazi Mabude | Head of Brand | Old Mutual | mail me |
For decades, the conversation about inequality has centred on income, employment and access to capital. Those issues remain fundamental. However, another divide is becoming increasingly important: the gap between people who can navigate an increasingly complex financial world and those who cannot.
The internet has put extraordinary amounts of financial information within reach of ordinary consumers. Artificial Intelligence (AI) is taking this a step further. It makes sophisticated financial information available instantly, conversationally, and at almost no cost. But access to information differs from knowing how to use it. That distinction could become one of the defining financial challenges of the coming decade, particularly when information is everywhere but financial capability remains uneven.
The World Bank uses the concept of “financial capability” to capture something broader than financial literacy. It encompasses not only what people know, but also the attitudes, skills and behaviours required to manage resources and make appropriate financial choices. That distinction matters enormously in South Africa.
A person can recognise the importance of saving yet still struggle to build an emergency fund. They can understand why they should avoid expensive debt yet still use credit to buy groceries. Similarly, they can recognise the importance of retirement provision while repeatedly drawing on long-term savings to manage financial shocks.
Increasingly, the divide is therefore not simply between people who have financial information and those who do not. Instead, it separates those who can translate information into decisions and action from those who struggle to do so.
South Africa’s advice gap makes this particularly important
The South African experience offers a powerful illustration. Our 2026 Savings & Investment Monitor found that 54% of working South Africans do not know where to seek financial guidance. At the same time, 48% report using general AI chatbots for financial guidance, compared with 40% who report using a financial adviser. That represents an extraordinary shift. It suggests that technology is filling a vacuum that the traditional financial system has not fully addressed.
The 54% figure may be particularly significant. For many consumers, perceptions of the cost and relevance of traditional financial services remain barriers. An ordinary household’s financial questions may not begin with portfolio construction. Instead, they may concern how to pay the electricity bill, manage several debit orders, or put enough money aside for a child’s education.
AI is attractive precisely because people face almost no barriers when asking questions. Yet greater access does not necessarily close the underlying knowledge gap. The report found that only 23% of respondents said they trust AI for financial decisions. This suggests that consumers recognise the difference between using technology to research a financial question and trusting it to make consequential decisions about their lives.
That distinction should be encouraged. Even when information is everywhere, consumers still need the knowledge and judgement to assess its relevance and reliability.
We have entered an age of abundant financial information
For the first time, a consumer can ask a machine highly personal questions about investing, taxation, debt, budgeting or retirement. Within seconds, the system can provide a seemingly appropriate answer. This creates an extraordinary opportunity for financial inclusion. It can help people understand terminology, explore options and enter financial conversations better informed. However, a fundamental limitation remains: advice requires context.
The right financial decision depends on far more than the question itself. It can depend on someone’s debt, dependants, income stability, existing investments, insurance, tax position, risk appetite, age and long-term objectives. An AI system knows only the context a user provides. Consequently, an answer can sound authoritative even when key pieces of that context are missing. This is why international policymakers are paying increasing attention to the issue.
The Organisation for Economic Co-operation and Development (OECD)’s recent work on AI and personal finance highlights the opportunities that greater accessibility and personalisation offer. It also identifies risks, including bias, inaccurate outputs, commercial influence, privacy concerns and financial exclusion.
Similarly, the IMF has warned that generative AI can produce convincing yet incorrect information. These errors can have potentially serious consequences when people use the technology in financial services.
The challenge of the AI age may therefore be less about accessing financial information than about learning how to interrogate it. When information is everywhere, the ability to question, verify and contextualise it becomes increasingly important.
The cost of poor decisions compounds too
We normally discuss compounding in positive terms. Invest consistently, earn returns on those returns, and time does much of the work. However, poor financial decisions can compound too.
Consider what happens when a household lacks sufficient protection against a financial shock. A burst geyser or an unexpected expense can force the household into debt. Servicing that debt reduces its capacity to save. The household may then withdraw existing savings to meet another expense, weakening its ability to absorb the next shock. Eventually, financial resilience steadily erodes.
OMSIM offers a striking glimpse into this pressure. Some 46% of working people report transferring money between accounts to avoid or manage debit orders. This is not conventional financial management. Instead, it resembles financial triage.
Moving money to delay a debit order may provide temporary breathing space. However, it can also trigger bank charges, missed-payment fees and further financial pressure. Consequently, a short-term coping mechanism can become an additional cost.
South African Reserve Bank data provides the broader context. Household debt stood at almost 62% of disposable income at the end of 2025.
Financial education cannot solve an income problem, and we should be careful not to pretend it can. Millions of households face genuine cost-of-living constraints. Nevertheless, knowledge and financial capability can influence how effectively people manage scarce resources.
Saving is not enough if savings never get the chance to grow
This becomes particularly important when we consider how people save. South Africans continue to show a strong desire to put money aside. The report found that working South Africans continued to allocate 22% of their income to savings. Yet the way people hold their money matters.
The proportion of people keeping cash unbanked has risen sharply, from 40% in 2020 to 64% today. There are understandable reasons for this trend. Cash is accessible, familiar, and immediately available when something goes wrong. For people who have lost money on poor investments, it may also feel safer. However, this accessibility involves a trade-off.
Money that people repeatedly withdraw to cover emergencies never gets the chance to compound. Similarly, cash that earns little or no return can lose purchasing power over time. As a result, people may save without necessarily building wealth.
This is where financial capability becomes far more practical than simply teaching people that they “should save”. The better questions are: What is the money for? When will it be needed? Which financial shocks require protection? Where should people hold different pools of savings?
The next divide
South Africa’s financial knowledge gap should not be viewed merely as a consumer education problem. It has much wider implications.
Two households earning the same income can achieve very different financial outcomes over a decade. Their decisions along the way can determine those outcomes. These include how they manage debt, whether they preserve savings, whether they invest money productively, how they absorb financial shocks, and whether they seek appropriate guidance when important decisions arise.
This is also why we should not cast AI as the enemy of financial advice. Used properly, it could become an extraordinarily powerful financial education tool. It can lower barriers to asking questions and help people build the confidence to engage with their finances.
However, information, education and advice serve different functions. The opportunity lies in connecting them. Consumers should be able to use technology to learn, research and ask better questions. At the same time, they must recognise when a decision requires personalised, accountable advice that considers their full circumstances.
Ultimately, the most consequential wealth gap of the future may not simply separate those who earn more from those who earn less. Instead, it may increasingly separate those who know how to make their money work from those who never had the knowledge, confidence or guidance to give it a chance. In a world where information is everywhere, the ability to turn that information into sound financial decisions could become one of the most important determinants of long-term financial wellbeing.
