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JOHANNESBURG — With three new entrants in the South African banking sector, consumers are about to get a lot more choices (and, hopefully, lower fees). Discovery CEO, Adrian Gore, has this week revealed more plans about what his bank will offer and it’s clear that it plans to adopt the rewarding model of Vitality. It will be interesting to see how this plays out and it will differentiate Discovery in the market. Meanwhile, some great technological offerings will also be on the cards from Patrice Motsepe’s Tyme Bank as well as the Michael Jordaan-backed Bank Zero. – Gareth van Zyl
(Bloomberg) – Discovery Ltd.’s new banking unit will reward customers for their “good” behaviour, applying a similar strategy to that used by its health-insurance operation.
When it opens for business in March, Discovery Bank will offer clients better interest rates and rewards for sound management of their finances under its Vitality program. The South African company’s health-insurance unit already offers customers incentives for keeping fit.
“This is a highly-contested market and our competitors are of considerable quality,” Chief Executive Officer Adrian Gore said in an interview at the company’s Johannesburg headquarters on Wednesday. “They’re strong, they’re well-run and armed to the teeth with technology, but I think the Discovery model is quite unique.”
— Discovery (@Discovery_SA) November 14, 2018
The new unit, which describes itself as the world’s first behavioural bank, will enter the market as at least two other competitors join the industry. They aim to challenge the dominance of the country’s top four lenders – including Standard Bank Group Ltd. and Absa Group Ltd. – with digital models that allow them to tightly control costs and keep fees low.
Discovery plans to attract clients from an existing client base of 300,000 credit card holders and about 1 million Vitality members to its mobile-banking operation. Apart from a branch at the company’s Johannesburg headquarters the bank will not have any outlets.
Discovery Bank will consider targeting small to medium-sized businesses – such as those run by brokers and doctors – as it expands its offering, Gore said.
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