Discovery recently announced it is planning to establish a retail bank, which will compete against ABSA, FNB, Nedbank, and Standard Bank.
Speaking to CNBC Africa, Discovery CEO Adrian Gore said they have had tremendous success with their joint venture with FNB on the DiscoveryCard – Discovery’s credit card.
This success gave them the impetus to look at building a full service retail bank.
“Given our market position and client base, combined with our product set, we think the opportunity to build a quality bank is real,” said Gore.
He said they have applied for a banking licence, and are currently finding the best people for leadership positions at the bank.
Gore said they will move their DiscoveryCard customers from FNB to their own platform as part of their retail banking plans.
Discovery Bank will do a few things differently
Gore said they will look to do a few things differently when setting up their bank.
“We are doing this without taking any shortcuts. We are attracting an exceptional team, we are putting a lot of capital into it, and we are carefully looking at all the technology issues.”
“Given the nature of our client base – which is right in the mass affluent base – we cannot have a niche product on the side. It has to be a full service offering.”
He said they will ensure their current customers will be happy to make Discovery their default bank.
Their focus, like with the Vitality products, will be to add value for clients. “If you do not add value to customers, you don’t get them.”
Gore could not say when the bank will be launched. “It will take some time. We have no banking licence yet, and we are currently just going through the regulatory process.”
He said it may take a few years.
Discovery Bank has great potential
South African banks which are currently serving the affluent market – ABSA, FNB, Nedbank, and Standard Bank – have reason to take notice of Discovery’s retail banking ambitions.
Former FNB CEO Michael Jordaan, who was behind making FNB the most innovative bank in the world, said the Discovery Bank has great potential.
“I think that Discovery Bank has the potential to be a big disruptor and a huge success, as it has been in other pockets of the financial services industry,” Jordaan told MyBroadband.