Discovery Bank reached more than 540 000 accounts in the six months ended December 2020, with over 287 000 clients, piling pressure on competitors in the growing digital financial services sector.
The digital-only bank, owned by Discovery Health, says its performance for the period under review has been “pleasing” as it performed better than expected.
Further, Discovery Bank says, its IT systems are managing the growing customer and transactional volumes well and proved stable over the 2020 year-end period.
Retail deposits grew and reached R5.7 billion, as at 31 December 2020, with advances more stable at R3.8 billion, which it says reflects its conservative lending strategy, resulting in a 69% lower arrears rate compared with the market.
Additionally, it says the migration of the FNB JV loan book was successfully completed and migrated clients continue to be highly engaged, with 53% upgrading to Discovery Bank.
“Subsequent to the JV book migration, and through new digital banking features and ongoing innovation across key client journeys, service levels have been continuously improving, with an average service score of 4.7 out of 5 and a >99% service level being recorded by the end of the period.”
The bank, owned by SA’s largest health insurer, was first announced in November 2018 and launched in March 2019, when it touted the new offering as the “world’s first behavioural bank” and a fully digital bank that can be joined by anyone with a smartphone.
Discovery Bank is one of the digital banks that are shaking up the South African retail banking sector because they are not stuck with legacy technologies and have cheaper fees.
The other players are TymeBank and Bank Zero.
TymeBank this week announced plans to explore international opportunities after securing R1.6 billion in funding from investors in the UK and Philippines.
The financial injection, which the bank says is one of the largest foreign investments any fintech company has secured in SA, will be used to expand TymeBank’s range of banking products, grow its lending portfolio locally, and will be channelled towards funding the digital player’s offshore expansion opportunities.
Bank Zero, which is entirely app-driven, started its closed beta testing phase late last year, when it introduced its card go-live and rigorous health-checks, such as simulated card attacks, card fraud detection and retailer readiness among a small group of citizens.
After recently rolling out end-to-end live beta testing, the bank says it is on course to join fellow competitors TymeBank and Discovery Bank, which have both ignited a financial revolution in SA, triggering a price war among financial institutions.
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