Discovery has set aside R1 billion to build the digital infrastructure for its new bank, which could launch within two years.
This is according to a report in Business Times, which highlighted that Discovery is currently awaiting the approval of its banking license.
Discovery has an advantage over the big four traditional banks – ABSA, FNB, Standard Bank, and Nedbank – because it does not have to maintain a country-wide network of branches and ATMs.
This means that Discovery Bank’s cost base will be much lower than its competitors.
Last year Discovery CEO Adrian Gore said that 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.”
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.
Jordaan told Business Times that Discovery can use its lower cost base to offer clients lower banking fees and better interest rates.