Discovery CEO Adrian Gore said Discovery Bank is showing “amazing data”, and its performance is exceeding expectations. Discovery’s interim results revealed their bank recorded an operating loss of R498 million over the last six months — 18% lower than the previous year.
This operating loss, although substantial, is reducing faster than planned due to an excellent performance across all metrics. By the end of 2021, Discovery Bank had 793,215 accounts compared to 540,252 accounts in December 2020. Retail deposits grew by 69% to R9.5 billion, and advances grew at 10% to R4.1 billion on 31 December 2021.
Speaking to Business Day TV, Gore said Discovery Bank is exceeding its growth plan. The driving factor for the bank is its ability to acquire clients and to enable clients to use the bank,” he said.
“I do not believe you can build a bank of very skinny accounts and people subscribing but not using the bank.” Gore said the fundamental driver of a bank is to offer a proposition that people use, where Discovery Bank is excelling.
The said Discovery Bank is ahead of plan in every respect, including the number of clients, deposits, and people using the bank. Discovery Bank’s value proposition is closely linked to its incentive programme, Vitality Money and Discovery Miles.
Commenting on this strategy, Gore said they see a strong correlation between clients’ Vitality Money status and banking behaviour like spending, arrears, and deposits. The segmentation of clients in an accurate way is taking place through Vitality Money,” he said.
The question remains whether Discovery Bank can shift financial behaviour through its incentive programme to help people manage their money better.
Although it is still early days, Gore said the initial data is remarkably strong. The key issue for our clients is the value proposition — if you manage your money well, you will be rewarded,” he said.
Source: mybroadband
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