Discovery Bank has its eyes on FNB and Capitec

Discovery Bank is planning its move into business banking over the medium term, with the financial services provider including this new arena in its longer-term strategy. 

The bank’s CEO, Hylton Kallner, told Daily Investor that this is a natural path for the bank to follow, with some of its clients already using personal accounts for business activities. 

The bank also has a natural advantage in the businesses that Discovery already serves through its medical aid scheme and life insurance. 

Thus, it already has a customer base it knows very well and can expand into without much difficulty. Furthermore, it will be able to offer businesses a complete financial services offering. 

However, while it all sounds good on paper, Kallner said the bank would not rush into offering business banking solutions, with it taking time to ensure it can produce a compelling offering. 

The bank is also busy building out what Discovery calls a “super bank”, with the banking app set to become the single touchpoint for all clients in South Africa. 

This will be done by integrating all Discovery products onto the banking app, enabling clients to access their medical aid, life insurance, car insurance, and Vitality rewards on a single platform. 

Kallner expects the bank to complete this buildout this year, with its financial success allowing the management team to think further down the line. This includes planning for a business banking launch. 

“It is still very much in a planning phase and is in our medium-term plan. I think we see a lot of clients already using the banking app for their small business or sole proprietorship,” Kallner said. 

“But, I think there is a lot of compliance and regulatory build that is required in order for us to move into the SME space or business banking space meaningfully.”

Kallner said that, for now, Discovery Bank is laser-focused on the retail space and sees business banking as a great medium-term opportunity. 

“We are not rushing to just get it done in the short term. We recognise that we need to do it properly,” he explained. 

Business banking battle heating up

South Africa’s banking landscape has always been highly competitive, with new challengers to the Big Four of Absa, Standard Bank, Nedbank, and FirstRand (FNB) emerging in recent years. 

While only one is truly competitive at a full-service level, that one being Capitec, others have focused on competing with specific offerings, particularly business banking. 

New entrants such as Yoco and iKhokha, which first launched with card machines, now offer small businesses an almost full suite of services from accounting software to short-term loans. 

Nedbank’s purchase of iKhokha in late 2025 will make it a more significant player in the business banking space, with the fintech able to leverage the Green Bank’s distribution and product offerings. 

The lender has also snapped up FNB Business Banking CEO Andiswa Bata and elevated the business banking operation to its own operating unit. 

Other giants, such as Standard Bank, have overhauled their business banking offering in recent years, focusing on quality over quantity. 

The Blue Bank remains a market leader with regard to commercial banking, which services businesses that fall just below Corporate and Investment Banking, but has a smaller presence among small and medium enterprises (SMEs). 

It has spent over R1 billion revamping its digital offering and expanding its low-cost MyMo product range into business banking to attract these clients. 

FNB remains dominant in the so-called enterprise banking space, which is made up of SMEs and sole proprietorships. This is where Discovery Bank is expected to play. 

Capitec has made a significant push into this space with its business banking offering, which has gained traction and is growing rapidly. 

Playing in this space against FNB and Capitec will prove challenging, but Discovery Bank has clear strengths of its own. 

“It is obviously a great opportunity for us, especially when you think about how many small businesses or even large companies are already part of the Discovery ecosystem through the health offering or life insurance,” Kallner said. 

“It is a great opportunity, but we have been very focused, and it has served us well so far to be super focused on the retail client base.” 

“It will be innovation-driven and, hopefully, quite disruptive. But, I think at the moment, we have got quite a lot to do still.”

The bank is also able to leverage the 12,000 financial advisors linked to Discovery Group and the 45,000 healthcare practices associated with it.