{"id":9442,"date":"2026-07-27T12:11:42","date_gmt":"2026-07-27T10:11:42","guid":{"rendered":"https:\/\/datanamixdev.wpengine.com\/media\/?p=9442"},"modified":"2026-07-27T12:11:42","modified_gmt":"2026-07-27T10:11:42","slug":"cofi-ai-and-open-finance-a-readiness-framework-for-south-african-financial-institutions","status":"publish","type":"post","link":"https:\/\/www.datanamix.com\/media\/2026\/07\/27\/cofi-ai-and-open-finance-a-readiness-framework-for-south-african-financial-institutions\/","title":{"rendered":"COFI, AI and Open Finance: A Readiness Framework for South African Financial Institutions"},"content":{"rendered":"

Executive summary<\/h2>\n

South Africa\u2019s proposed Conduct of Financial Institutions (COFI) Bill would consolidate financial-sector conduct requirements into a technology-neutral, activity-based and outcomes-focused framework. Its relevance to AI and open finance lies in the way it connects customer outcomes, governance, accountability and data capability across increasingly digital financial-services ecosystems.<\/p>\n

Core entities and their roles<\/h2>\n

National Treasury<\/h3>\n

Responsible for policy development and drafting the proposed legislation.<\/p>\n

Financial Sector Conduct Authority<\/h3>\n

The FSCA is the market-conduct regulator expected to supervise conduct standards and customer outcomes within the COFI framework.<\/p>\n

Financial institutions and supervised entities<\/h3>\n

Organisations and representatives performing regulated financial activities, including participants in digital and platform-based customer journeys.<\/p>\n

Financial customers<\/h3>\n

People and organisations whose treatment, disclosures, product outcomes and access to remedies sit at the centre of the proposed framework.<\/p>\n

Important COFI concepts<\/h2>\n

Activity-based regulation:<\/strong> regulation focused on the financial activity being performed rather than only the traditional category of institution performing it.<\/p>\n

Technology neutrality:<\/strong> conduct expectations that remain applicable as delivery technologies and business models change.<\/p>\n

Outcomes-focused supervision:<\/strong> evaluation of whether customers experience fair and appropriate results, not merely whether a checklist was completed.<\/p>\n

Open finance:<\/strong> a connected ecosystem in which authorised data sharing, APIs and digital platforms allow multiple providers to contribute to a financial-service journey.<\/p>\n

Data-driven supervision:<\/strong> the use of reliable information and reporting to identify emerging conduct risks and assess customer outcomes.<\/p>\n

How AI fits into the proposed framework<\/h2>\n

AI can support credit assessment, fraud detection, customer service, personalisation and operational decision-making. A technology-neutral framework means organisations remain accountable for customer outcomes even when a model, platform or external technology provider contributes to the decision.<\/p>\n

AI governance should therefore connect:<\/p>\n