Discovery Bank Is Slowly Gaining Traction

Discovery Bank
Discovery Bank

Discovery Bank, launched in 2018, is slowly gaining traction as more customers sign up to use its digital banking services.

The bank is powered by the country’s largest medical aid provider, Discovery Health.

Described as the world’s first behavioural bank, the fully digital bank promises to help clients bank healthier and leverages Discovery’s shared-value model.

Discovery announced on Thursday that Discovery Bank continued to gain traction with 362  000  clients for the year ended-June 2021 versus  274  000  clients in  July  2020.

Discovery Health added that the band increased the number of accounts to 649  000  compared to   505  000  accounts in July 2020, expanding its existing Discovery and Non-Discovery client base and achieving 500 average daily new-to-Bank sales, in line with the medium-term forecast.

“There was a  steady improvement in product mix over the year with transaction accounts and credit cards making up over 80% of new business,” Discovery Health informed investors.

The medical aid provider added that Discovery Banks’s retail deposits grew by  167%  to  R8.18 billion.

“A  deliberate decision to pursue a prudent credit strategy resulted in moderate advances growth of  5%4 to  R3.83  billion at 30 June 2021. The quality-focused credit strategy was evidenced by the low credit loss ratio of 4.6%, which  includes  a  COVID-19  overlay,  and high average client non-interest revenue (NIR) levels.”

The  Bank continued to focus on product innovation and building a differentiated and sophisticated digital platform.

“This included the roll-out of payment platforms like  Apple  Pay and  Discovery  Pay, an enhanced account origination journey with unique features such as  Virtual  Cards;  a  more valuable Discovery  Miles currency;  enhancements to travel benefits; and more differentiated products in the pipeline. There was a strong improvement  in  utilisation  over  the  period.”

Discovery Health said compared with  July  2020,  clients depositing their salary, initiating debit orders and making digital payments grew substantially, driving strong  NIR  levels for Discovery Bank.

“The  shared-value fundamentals  also  emerged  as  expected  with  clients  on  Gold and  Diamond Vitality  Money  status  exhibiting  superior  banking dynamics:  94%  lower  arrears  rate  compared  with  clients  on Blue  Vitality  Money  status;  four  times  higher  spend  compared with  clients  on  Blue  status, and nine  times  higher  average deposits compared to the average client.”

Discovery Bank competes with Tymebank, Bank Zero, Bidvest Bank and other big five banks – Absa, Capitec, FNB, Nedbank and Standard Bank.

TymeBank is owned by African Rainbow Capital (ARC) Financial Services Holdings, a company within Motsepe’s Ubuntu-Botho Investments stable

 

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