Discovery has unveiled its plans for Discovery Bank – including how its accounts will work, and how it plans to change how South Africans work with money.
The group on Wednesday showcased its digital-only banking product, which aims to make banking more efficient, and move away from traditional banking silos through introducing rewards-based incentives to encourage behavioural change when it comes to money.
Discovery CEO, Adrian Gore said that the bank will go into a beta-testing phase, with an eye to launch to the public in March 2019.
He said that the “soft spot” for accruing customers is through existing clients – the bank has 300,000 card customers, and just over two million Discovery customers in total. Gore said that the bank could develop a very loyal market.
“For the ﬁrst time, South Africans are being oﬀered a bank that’s built, from its core, to improve ﬁnancial behaviours,” he said.
“In this way, Discovery Bank actively encourages and rewards ﬁnancial resilience, which leads to beneﬁts in all areas of life. It’s time to bank healthier. There couldn’t be a truer manifestation of Discovery’s core purpose – to make people healthier and enhance and protect their lives.”
The insurer said that five controllable behaviours are linked to three risks that lead to 80% of the reasons why individuals do not meet their ﬁnancial obligations.
“Developing a bank that focuses on changing these ﬁve behaviours will have a signiﬁcant impact on people’s financial health,” it said.
The group said that savings statistics in South Africa paint a dire picture of the financial state of health. Debt-to-income levels are at a record high, meaning people have little disposable income to save or invest.
“More importantly, 40% of consumers are struggling to make debt repayments and fewer than 10% are prepared for even an adequate retirement. Addressing this state of financial ill health has been a driving force behind the design of Discovery Bank,” it said.
“It’s time to kickstart a new set of behaviours around money by encouraging financial resilience that comes with additional reward.”
The bank will use personalised interest rates and attractive rewards from a network of partners.
“No other bank has taken on the challenge of improving its clients’ financial wellness in a fast, personalised and tangibly rewarding way, Discovery said.
As with all Discovery products, Discovery Bank has been designed around people, not for them.
“It’s personalised to cater for individual spending and saving habits. It can also be integrated with other Discovery products, resulting in more affordable life insurance, faster growing investments, smarter insurance and convenient health payments.”
Banking on data and tech “significant progress has been made in developing infrastructure, operating processes and the customer value proposition,” said Gore of the run-up to Discovery Bank.
“The result is a fully digital bank with app-based transacting and no need for physical branches at all. This all-digital approach oﬀers a level of interaction and personalisation that gets people engaged and excited about becoming financially savvy.”
The bank will offer a number of personalised tools, using data from various sources to deliver spend management and financial planning features to customers.
Gore said the bank would offer interest rates based on a client’s Vitality Money status, with Diamond customers having lower interest rates.
These integrations with existing Discovery products will enable users to access better interest rates, life insurance premiums, and more accessible payments to these services.
Gore said that Vitality reward points can be monetised and deposited into a Discovery Bank account.
Discovery Bank will offer a basic Discovery 1 account in addition to a comprehensive Discovery 1 Plus product.
Discovery 1 will be offered as the bank’s core account, functioning as a fusion of the Discovery credit card and a transactional account.
Customers will earn an interest rate on their account balances and the product also includes a Vitality savings account, into which all the cash-backs and rebates for Vitality will be paid.
The Discovery 1 Plus account will offer a more comprehensive experience, including separate credit and transactional functionality and dynamic interest rates.
There will be no set fees for the Discovery 1 account, with customers instead paying as they transact.
The Discovery 1 Plus account will include a bundled market-related fee which Discovery said it will not yet disclose, but all transactions will be free.
Additionally, all Discovery Bank payments reflect instantly and the bank offers real-time EFTs to all other banks in addition to third-party payment platforms such as Samsung Pay.