Discovery Bank challenges FNB

Discovery Bank, a digital bank launched in 2019, is targeting rival First National Bank (FNB) with the introduction of two new products. These offerings aim to bridge the gap between Discovery Bank and traditional competitors, particularly in the areas of mortgage and vehicle finance.

1. The first product is the launch of home loans in partnership with SA Home Loans. Discovery Bank will provide up to a 1.5% reduction in interest rates on personalized rates, depending on the customer’s banking product and Vitality Money status. This move positions Discovery Bank as a full-service bank, complementing its existing credit card and transactional suite offerings.
2. Customers with credit card accounts or transaction accounts with bundled fees can expect a reduction of 0.25% to 0.75%, while banking suite product holders may receive a reduction of 0.5% to 1%. Additional reductions are available for holding home insurance with Discovery Insure and the Discovery Life Home Loan Protector.
3. The second strategic move is a partnership with Checkers, a popular supermarket chain in South Africa. This partnership is an expansion of Discovery Bank’s existing HealthyFood benefit under its Vitality program, which provides cashback rewards for healthy food purchases. Checkers will join existing partners Woolworths and Pick n Pay in offering these rewards.
4. Vitality members will be able to choose a primary in-store partner (Woolworths, Pick n Pay, or Checkers) and a primary online partner (Woolworths Dash, Pick n Pay asap, or Checkers Sixty60) to maximize their HealthyFood rewards. This flexibility caters to members’ preferences for different retailers in-store versus online.
5. The introduction of home loans and the partnership with Checkers will enhance Discovery Bank’s competitive position in the market, particularly against FNB. These strategic moves aim to attract more customers and provide a comprehensive suite of banking services.
6. Discovery Bank’s home loan offering is expected to generate significant interest, with potential savings of up to R400,000 in interest over 20 years for a R2 million loan. The preliminary quote for a home loan can be obtained within five minutes through the bank’s app, and loans with terms up to 30 years and up to 100% financing are available for new loans, switches, or refinancing.