How the world’s first behavioral bank is focusing on customer needs

Inspired by the Discovery Group’s Vitality Shared-Value Insurance model, Discovery Bank’s vision concentrated on building the world’s first behavorial bank – encouraging customers to be financially healthy and rewarding them for their efforts through its Vitality Money rewards program. Customers are incentivized to make shrewd financial choices to help them advance through the bank’s Vitality status levels – meaning the better they are at maintaining strong financial health, the more they are rewarded. These rewards vary from dynamic interest rates to flight and gym discounts. The bank’s vision also included a long-term plan, of up to 30 years, to help customers maintain continual financial well-being.

From the beginning, the bank understood that it would need to partner with external experts who could assist the bank in developing its operating model. EY’s expertise in banking, customer experience, risk and compliance issues, and SAP’s expertise in technology, were integral to ensuring that the bank’s back-end function developed into reality.

The challenge Discovery Bank posed for EY, as the partnership began, was to work with SAP to efficiently implement a back-end system to complement Discovery Group’s vision. The bank’s ambition to help its customers improve their financial health would require advanced banking technology and automated solutions.

EY’s work with Discovery Bank was carried out in different phases, spanning three years. During this time, EY’s work ranged from helping Discovery Bank to navigate regulatory requirements and obtain a banking license, to deciding how best to implement SAP’s core banking technology platform, with a constant focus on customer experience.

EY’s work with SAP enabled the development of an unstructured, agile working environment which facilitated the bank to incrementally improve its back-end systems and processes.
 

Building a united team of partners
 

The EY team’s comprehensive insight into the bank’s back-end system, and its granular knowledge of SAP’s core banking platform technology, all contributed to it becoming the bank’s primary partner in the detailed design phase of the project. Indeed, during this early period, Discovery Bank’s staff totalled 6 people, whereas EY’s team came to over 20.
 

In practice, this meant that EY became responsible for managing the project’s external back-end partners, which surged from roughly 50 to over 160 at the peak of the build phase. This included SAP, a CRM partner, a trading partner and a Germany-based marketing software partner.
 

By focusing on the shared purpose of creating a truly innovative bank, EY was able to bring these disparate teams together as one. A further challenge – which helped to cultivate this one-team mentality and ensure a strong focus on seamless collaboration – was the bank’s desire for all of the technology and processes to be implemented over a 12-month period.

Launched in March 2019, Discovery Bank is now one of the main challenger banks in South Africa.
 

A new approach to banking
 

Discovery Bank’s approach shows that securing personal financial well-being is not just the responsibility of the individual, but that banks can also play an important role in helping people achieve this aim.
 

It is in banks’ interest to help their customers better manage their finances – because more financially secure customers result in more financially secure banks, and a more financially secure society.
 

If people are more financially literate, and have worked to increase their financial resilience, this can help stabilize the banking sector and serve as a kind of insurance for society.
 

Improving financial – and physical – well-being
 

By putting a spotlight on financial well-being and, crucially, by offering a digital-first way for its customers to achieve this, Discovery Bank is offering a pioneering example to the broader financial sector of how to develop greater financial health while boosting customer satisfaction levels.
 

The bank’s personalization of products and services, and the availability of numerous incentives and rewards through its Vitality Money platform, presents customers with an alternative way to bank in today’s transformative age.
 

Discovery Bank’s vision to motivate customers to bank healthier is an important step in the financial sector’s recognition of the role it can play in improving people’s financial well-being – and that of the economy as a whole. What Discovery Bank has created could just be the start of a whole new way of banking.
 

Thank you to Jérôme Frey (Discovery Bank), and Gary Sandham and Darrel Orsmond (SAP Africa) for their help with this case study.