Discovery is offering South Africa’s first behavioural bank. Photo: Supplied

JOHANNESBURG – Discovery will give black depositors 10 percent equity of its tech-led bank, the financial service’s group chief executive Adrian Gore said yesterday.

Speaking at the company’s headquarters in Sandton, Johannesburg, Gore said the bank planned to open to the public early next year and 10 percent of equity would be allocated to black depositors at no cost to them.

“The intention is that when black depositors join the bank, they will be given an equity. There will be no requirement for them to purchase shares at all,” said Gore.

He conceded that the approach could be challenged politically as the plan excluded white customers, but said that the bank would consult widely and the plan was at an initial stage.

Gore said Discovery was offering South Africa’s first behavioural bank. 

Unlike competitors, the bank aimed to improve the financial wellness of its clients.

“We are planning to make people healthier in a financial sense. The idea is to guide people on what their financial difficulties are,” he said. Unlike traditional banks, which operated in silos without engaging clients, the bank would be transparent in setting borrowing and saving rates. 

Vitality Money, through which the bank will use personalised interest rates and attractive rewards, would anchor the bank, Gore said. Vitality Money benefits would be based on the behaviour of clients.

Customers will benefit from perks, including discounted flights, and fuel spend depending on their financial behaviour. Vitality began as a health programme that encourages and rewards members for living well, and has extended to the other products including Discovery Insure. Gore said the bank’s target market was the 2 million members of Discovery.

“The soft spot for the market is current Discovery clients. We believe the bank has a broad market, but the initial target is our initial customers. There are 2 million members of Discovery,” he said.

Gore also said that the initial loan of the company were borrowings and savings, adding that offering home loans and car loans were not on the cards. “We do not see a massive differentiator in home loans and vehicle loans. We do not see it in phase one,” he said.

It will be launched in March with the company expected to complete the testing of the functionality of the bank during the festive season. 

BUSINESS REPORT