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