Discovery Bank explains “no whites” share plan

Discovery Bank was launched this week, offering a completely digital banking service with products designed to improve the money management of clients.

Discovery Bank is built around behavioural economics and leverages a similar rewards model to the company’s Vitality programme.

It aims to be the first bank in South Africa that works to address behaviours leading to poor financial outcomes, Discovery CEO Adrian Gore said.

Speaking to the SABC, Gore said Discovery Bank will give its clients great value for healthy life choices and good financial decisions.

Some of these benefits include dynamic interest rates and “fantastic discounts” with Discovery’s commercial partners.

He added that Discovery Bank offers the latest capabilities because it was built using the most advanced technologies.

Gore described their “mobile first” bank as the third way to do banking – somewhere in between traditional banks and fintech services.

Discovery Bank share scheme

As part of its value proposition, Discovery Bank will give black depositors 10% equity in the business.

These shares will be given to black depositors without any cost or risk 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,” Gore said.

The Discovery CEO admitted that there is some political risk because the plan excludes white customers.

This risk started to emerge after a Business Insider article about the topic was published, with many white commentators threatening to leave Discovery Health because of perceived racial discrimination.

Discovery explains

Felicity Hudson, head of reputation management at Discovery, told MyBroadband that their vision is to build a uniquely South African bank that builds a financially stronger country.

“A key part of this vision for a modern, sustainable South African bank is a shareholding that supports and meets the long-term transformation goals of the financial services industry,” she said.

In conjunction with Discovery’s existing black shareholder base, the proposed scheme will align Discovery Bank with the sector targets.

However, this will be done in a way that is “broad-based and that recognises its first black clients and enables them to share in the growth of the bank”.

“As a new bank, it’s also important to achieve scale – the BEE scheme is a part of the overall customer growth strategy and it will benefit all clients,” said Hudson.

She added that they will be consulting widely with their customers and stakeholders and gathering views to inform their approach. This will be finalised by March 2019.

Now read: Discovery Bank launched – All the details

Latest news

Partner Content

Show comments

Recommended

Share this article
Discovery Bank explains “no whites” share plan