Discovery Bank wants to be competitive with its transactional banking account in three major areas.
These are: fees, rewards and interest rates.
Discovery chief executive Adrian Gore said the major banks focused on fees and rewards but not interest rates.
Late last month Discovery Bank unveiled more details about what it would offer, including its fee structures and the sort of bank accounts it would provide.
Gore said Discovery Bank had conducted research on banking fees.
This was conducted across 12 000 clients, 611 000 transactions and R800 million in transaction value.
The average monthly fee paid across customers in the study was R206 a month.
“The average fee differs per segment, increasing from R132 a month for lower-income earnings to R214 a month and R309 a month for middle- and high-income earners, respectively,” the survey showed.
He said Discovery Bank would offer basic transactional accounts only, as well as structured accounts that would include transactional and savings accounts and credit cards.
Three types of accounts would include Discovery 1, Discovery 1 Plus and a Vitality Savings Account.
Gore said the Discovery 1 bank account would be a “very basic transactional account”, which would offer a credit card and savings account.
The Discovery 1 Plus account would be “completely bundled basis”, meaning account holders would be charged on a pay-as-you-transact basis.
The Discovery 1 Plus account would include a credit card as well as a savings and transactional account, and dynamic interest rates.
The Vitality savings account would have zero fees, a dynamic savings rate, Vitality cashbacks and rebates that would be paid into the account.
Gore said Discovery Bank wanted to launch its healthy banking product and its family banking product by June this year.
Healthy banking would provide healthcare benefits to Discovery Bank clients. Family banking would offer benefits to family members.
In a break from what most major banks offer, other than Capitec, Discovery Bank would offer a decent interest rate on bank balances.
A rate of about 5% would apply but could be 1.5% higher, depending on a client’s Vitality status.
“Most banks offer zero interest on transactional accounts. Clients with positive balances in their accounts receive little or no interest with the exception of one or two banks,” the survey showed.
Late last month Discovery started the process of rolling out the bank to the public.
“We announced to all our members that the bank is now rolling out. We have 50 000 people who have come forward to open bank accounts,” Gore said.
“We see a couple of thousand in the first month. But we see that accelerating.
“We are hoping by June that tens of thousands of people would have joined and then we will open for new business,” he said.
From July the bank would open full access of its products to the public.
Those who could join from late last month included Discovery staff, Discovery cardholders and members of the public who applied for early access.
Discovery Bank would include a Vitality Money loyalty scheme that would provide statuses that would range over five levels.
The bank would also offer dynamic savings rates and a dynamic borrowing rate depending on the client’s Vitality money status.