03 May Digital Banking Success Story – Discovery
Using human behavioural data to drive the banking experience
Discovery is a truly South African success story that has grown entirely organically, rather than by acquisition. Discovery is the largest Medical Insurer in SA, with a market share of 38% being more than twice the size of its nearest competi-tor. The key to Discovery’s success is in the use of behavioural data. Under Discovery Vitality’s Shared-Value Insur-ance model, Discovery rewards customers that regularly go to the gym, eat their vegetables and do their medical check-ups. Customers are then given the reward options for food, gadgets, discounts, cheap ﬂights, and holidays.
Two aspects enabled the success of the model. The ﬁrst is technology, the second is the under-standing that risk is behavioural. Vitality is now the world’s largest scientiﬁc, incentive-based wellness solution.
- Discovery Bank will be based on the same premise as the Vitality’s Shared-Value model, but will push innovation further using behavioural data.
- There will be no physical branches to go to as the customer will only be required to download an app, and go through a quick veriﬁcation process which includes taking a selﬁe-photo. It will take less than 5 minutes to open a new account.
- Once opened, the bank uses behavioural data to decide whether to oﬀer loans, and at what level.
The digital banking space is on the rise with more and more competitors participating in the space. Discovery Bank has successfully launched in 2019 and is targeted at any South African who is looking for convenience and low fees. Discovery Bank will mainly encourage better spending and saving habits by using the vitality model of reward-ing good behaviour. These beneﬁts will be achieved through good behavioural outcomes, such as maintain-ing a positive bank balance and managing your debt. The bank will be oﬀering a product that is uniquely global and that does not need capital upfront. This will translate into rapid growth. Their approach is to focus on customers and to go wherever the customers are.
Find the customer, as opposed to the customer needing to ﬁnd you.