Discovery Bank hits 1 million clients

Discovery Bank announced today that it has reached the milestone of acquiring one million clients. This follows its announcement earlier this year that it had over two million active accounts.

The bank has reached these milestones at the same time it has been bringing new products to the market, becoming a full-service bank earlier this year after launching its home loans product. 

“This milestone of our first million clients is a special one. While it’s only the beginning for us, we are incredibly proud because it reflects the impact of our unique shared-value model,” CEO Hylton Kallner said  

“This milestone also comes ahead of our plan, which is a testament to the hard work, dedication, and unwavering commitment of everyone at Discovery Bank to deliver excellence as we work towards our vision to build the best bank in South Africa.”

Discovery Bank started its official operations in 2019 after receiving its banking licence in 2017, building its systems and moving clients with credit cards to its platform. 

This was enabled by Discovery’s initial partnership with FirstRand. Partnerships have been a theme of the bank’s growth, with its home loan product being administered by SA Home Loans. 

Kallner previously explained to Daily Investor that partnerships are key as they give the bank more runway and enable it to immediately serve its clients without any capacity constraints.

Discovery Bank’s financial performance has also improved markedly in the past few years, with the bank breaking even on a monthly basis earlier this year. 

The bank’s deposit base grew 31% to R16.67 billion in the first half of 2024, with advances increasing by 20% to R5.75 billion. 

It also said its clients have accumulated more than R90 million in interest rate boosts and discounts through the shared-value approach.

It uses Vitality Money to incentivise banking clients to make healthier financial decisions and work more responsibly with their finances.

Vitality Money can be used on rewards like a dynamic interest rate increase, getting up to 100% back on HealthyFood, and a 75% discount on HealthyCare.

The Discovery Bank app also rewards users for spending their money responsibly with Vitality Active Rewards.

In its latest set of interim results, the bank said it had maintained its average of 1,000 sales per day over the six month period. 

With the addition of its new home loan product, the bank has become the first full-service digital bank in South Africa. 

“When we started building Discovery Bank, we envisioned a financial institution that would revolutionise banking by applying the shared-value model we pioneered in insurance and healthcare and placing a digital bank branch in every client’s hands,” Kallner said. 

“Our goal is to drive financial inclusion by democratising private banking services to provide all our clients, irrespective of their product type or income, with personalised, excellent digital service and access to dedicated bankers.” 

Kallner has also been explicit about the bank’s cautious approach to growth and tight lending standards. 

This can be seen in its deposits being around three times larger than its loans and advances. Its deposits grew 31% to R16.67 billion, while advances grew by 20% to R5.75 billion. 

Furthermore, most of Discovery’s clients are classified as low risk or exceptionally low risk, with almost none of its new business coming from very high-risk clients. 

Thus, while its peers have been flagging a sharp rise in non-performing loans and closing their lending taps, Discovery has kept its non-performing loans under tight control.