Discovery banks on good behaviour. Through Vitality Money, customers will get interest rates in line with their

behaviour.

Discovery has finally launched what it says is the world's first behavioural

bank, incentivising customers to become financially fit.

The new branchless bank is currently busy beta testing on its staff and will

open for customers in March. It says the fully digital bank will leverage the

group's shared-value model and will do for banking what Vitality did for

insurance in the context of financial risk and banking systems. It will try

and do this by encouraging customers to spend less than they earn, save

regularly, have insurance in place, pay off their property, and invest for the

long term. This will alleviate unaffordable debt, exposure to unexpected

expenses, and insufficient income in retirement. Customers will receive

interest rates directly linked to their financial behaviour.

The banking system in South Africa is world class and our competitors are

brilliant," Discovery chief executive Adrian Gore said. "We did, however, see

a gap in-between the traditional offerings and Fintech offerings - a third

entry point that is essentially a new category of banking and a first of its

kind globally: a behavioural bank."

The new bank is up against stiff competition, however, with a number of other

new entrants competing in the branchless space. Apart from incumbent Investec,

Discovery Bank will be competing for customers with the likes of Patrice

Motsepe's Tyme Digital and Bank Zero, co-founded by former FNB CEO Michael

Jordan.

Last week, Discovery sold new shares to raise the 1.85 rand billion it needed to

buy FirstRand's 25% stake in Discovery Bank, a requirement of the Registrar of

Banks when it granted Discovery a banking licence last year.

It said 10% of the bank's shares would be owned by its black depositors.

Discovery's shares closed 1.5% up at 164.76 rand yesterday.

Wow! Black depositors to own a stake in Discovery Bank. If they said this at

the beginning of the presentation I may have paid some attention

#Discoverybank

-- Craig Gradidge (@gradidgec) November 14, 2018

So now we've got to Discover a bank Zero? Or is there Zero to Discover in a

new bank? #whotochoose @MichaelJordaan @Discovery_SA

-- Jaco Els (@mynameisjaco) November 14, 2018

Talking to Adrian Gore at the launch of @Discovery_SA 's new #DiscoveryBank.

Not sure what made him laugh but you can hear it all on @CliffCentralCom

tomorrow morning. pic.twitter.com/8ezpXXNGBH

-- Gareth Cliff (@GarethCliff) November 14, 2018