Discovery Bank’s big AI play

Discovery Bank has launched several new features on its platform, including an expanded rewards system for financial planning, enhanced security features, and a new artificial intelligence (AI) capability to personalise user experiences. 

This is the latest expansion of Discovery’s shared-value model into the banking ecosystem, with its Vitality model driving better outcomes for clients and the bank. 

Discovery Bank has grown in leaps and bounds since launching with just a credit card in November 2018.

It is now South Africa’s first full-service digital bank, offering retail clients products ranging from savings accounts to home loans. 

Building a full-service bank in less than a decade has not come cheaply. Discovery has pumped R15 billion into the bank since its inception.

Discovery’s R15 billion bet on its bank is beginning to pay off. In January 2025, the bank reached profitability ahead of target. 

Crucially, Kallner told Daily Investor that the bank is profitable even after hefty New Business Acquisition Costs (NBAC), which have been the biggest expense since launching.

“The momentum the bank has got is very strong. If we were to stop writing new business today, for whatever reason, you would see a profit of around R40 million a month emerge,” Kallner said. 

This is vital for the bank to become self-standing and require less capital from Discovery at a group level.

Key to this growth has been the consistent launch of new products to ensure the bank can meet all of a client’s needs. 

Crucially, the bank has managed to grow without taking on huge amounts of risk by cautiously growing its advances book and using its Vitality Money behavioural change programme to help clients better manage their money. 

On 27 March, the bank announced an expansion to the Vitality Money programme to include rewards for financial planning to align clients’ short-term goals with their long-term aspirations. 

Vitality Money is designed to empower clients to manage five controllable behaviours which will help prevent 80% of situations where clients are unable to meet their financial obligations. 

Financial planning is the critical link between short-term controllable behaviours and longer-term goals and aspirations. 

“The data is clear. Discovery Bank clients who engage with Vitality Money are financially healthier, save more and spend prudently,” CEO Hylton Kallner said. 

The bank also revealed enhanced security features, such as new card and device management functionality, fraud monitoring, and persistent warnings. 

Its banking app will now also have a Digital Account Vault and access to emergency services through Discovery 911.

The largest announcement was the launch of Discovery AI on the banking platform, which enables the bank to offer clients more personalised, sophisticated, and intelligent digital offerings. 

“We see a future where banks connect seamlessly with every aspect of a client’s life – their health, finances, lifestyle, and aspirations,” Kallner said. 

“Digital disruption, changing consumer expectations, and the power of AI and data have completely redefined what financial services can offer.”

Kallner explained that too often, banking remains transactional rather than driving better financial behaviour, reducing a client’s risk and offering personal solutions. 

“From the outset, we set out to build a bank that rewards positive financial behaviours, empowers people with data and technology, and operates as part of a greater ecosystem designed to improve lives.”

Discovery Bank’s use of AI is set to enable it to move beyond one-size-fits-all services and deliver tailored support for clients, improve accessibility and bring private banking insights and service to everyone. 

Clients will be able to access Discovery AI through the Bank’s WhatsApp channel. 

After being securely authenticated in the app, clients can access tailored answers about their spending and savings patterns, better understand their accounts, and get suggestions to budget effectively and maximise product features and rewards. 

This ties into Discover Bank’s new enhanced security features, as it has flagged a rise in fraud attempts, phishing, cloning, card fraud, and other criminal tactics. 

Kallner said the bank constantly reviews how it can better secure clients’ money and enhance its multi-layered security features. 

These include adding persistent, in-app fraud warnings, which remind clients to think twice and verify who they’re speaking to if they’re on a call when opening the app. 

The bank has also added an additional layer of security to move clients’ most valuable accounts to a digital vault that can only be accessed via a client-selected security code. 

Besides hiding the account, it also allows clients to enter a custom panic code to silently alert Discovery Bank if they are accessing these accounts in the digital vault under duress. 

“We’re patenting this as an industry first. Once you enter your chosen panic code, transactions will continue to be processed as normal, but it will alert our fraud management team,” Kallner said. 

The team will start monitoring transactions and, when necessary, activate an emergency response – including alerting law enforcement and armed response. 

He said the Discovery Bank app will also link clients to emergency services with Discovery 911 when they need it.