The bank is now firmly at the centre of everything Discovery does
· Citizen
Since launching Discovery Bank in 2019, the group has referred to it as its “operating system” and as the “composite maker” for its South African business.
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What this means in practice is that the bank has been designed from the ground up to pull together all the group’s various product houses.
The Discovery Miles rewards programme has always been the foundation, and the integration of Health, Life, Invest and Insure – for those holding these products – has been a key feature of the app for years.
But the bank’s evolution over the last five years has been especially rapid.
Group CEO Adrian Gore says: “Discovery Bank has evolved into a platform, one capable of integrating and orchestrating the full financial lives of clients in a way that traditional banks simply cannot. The platform now allows us to move beyond the traditional definition of banking.
“People’s financial lives are inherently complex because traditionally, the products exist in separate slots. Banking is in one app, medical aid in another, life policies locked in a safe somewhere … Different providers, different systems, different interfaces, different rewards.
“Clients are forced to manage these independently, even though they’re all part of the same financial life.
“We are determined to solve this by creating an entirely new category of financial institution.”
Rise of the ‘super bank’
The bank now refers to itself as a ‘super bank’.
Gore says a “super bank is a bank that integrates and orchestrates the full spectrum of a client’s financial life through a single intelligent platform. It uses technology, data and AI to connect these traditionally separate financial silos into a single experience centred around the client.
“The super bank therefore becomes more than a bank. It becomes the operating system for a client’s entire financial life.”
With this vision, one can clearly see how the group is thinking about the bank. For Discovery, the bank is now the core of the business. And, by extension, the bank app brings everything together.
Customers can view details of the other products they hold, for example, medical aid claims, insurance cover and investment performance.
Hylton Kallner, CEO of Discovery Bank, says: “If you don’t yet have a particular Discovery product, you can reach out to a Discovery financial advisor for assistance or alternatively, tap the relevant icon and connect in real time directly to a specialist from within the app using in-app calling.”
App at the centre
However, in a subtle switch made recently, new products from other verticals are now being launched in the bank app.
A new life insurance product, the Digital Life Plan, is only available via the app. Kallner says the group’s integrated data “makes even traditionally complex processes like insurance activation simple and digital”.
Thousands of bank clients have already used this to get instant car insurance quotes.
“Life insurance is one of the most important financial decisions a person makes to provide long-term financial protection and security for your family, and yet traditionally, the process has also been one of the most cumbersome.”
With the Digital Life Plan, clients “can now activate cover of up to R3 million instantly in just a few taps. You are guided through a streamlined medical and risk assessment journey, ensuring faster, more accurate underwriting and instant risk assessment and quoting.”
This policy can only be activated in the bank app (which further reduces costs and commissions).
It is also allowing Discovery Bank clients who aren’t with Discovery Health or Life to join the Vitality shared value programme for R159 per month.
Vitality offers discounts on gym memberships, weekly rewards for achieving exercise and sleep goals, as well as Discovery Miles back on HealthyFood and HealthyCare purchases.
In addition, Bank clients can get 14 days of free access to a Virgin Active club of their choice, also activated in the bank app.
It’s no surprise that Discovery has placed the bank at the centre.
Cross-selling engine
Roughly two-thirds of the banking clients it adds monthly are new to Discovery, meaning they don’t hold Health, Invest, Insure, Vitality, Gap or Life products. This is almost counterintuitive, given the size of the group’s market share in Health and Life, in particular.
What this means for Discovery is that out of the roughly 33 000 clients it adds each month, around 22 000 of them can be sold other products.
Of course, the costs of selling a policy to an existing banking client are a fraction of those when selling a policy to a client who isn’t already with the group.
Also, adding non-Health or non-Life clients to Vitality, for example, means incremental revenue growth for little effort.
Next phase of growth
With the bank profitable and a client base growing at 28% (1.4 million at the end of 2025), it is clearer than ever that the bank will be the single most important growth driver for the group over the next five years.
Increasingly, this base will also drive the growth in its other businesses.
It has already articulated its ambition: with between 2 million and 2.5 million clients, the bank will produce R3 billion in operating profit a year. This equates to roughly a quarter of the SA businesses.
This article was republished from Moneyweb. Read the original here.