MILESTONE | South African Challenger Bank, Discovery, Hits One Million Customers

South Africa’s Discovery Bank, a digital-only bank, which refers itself as ‘a bank on the palm of your hand’ has acquired its first one million clients, the company said.

Discovery Bank started official operations in 2019 after receiving its banking licence in 2017, building its systems and moving clients with credit cards (part of Discovery’s initial partnership with First Rand Bank) to the Discovery Bank platform.

According to the bank, continued product innovation and a unique shared-value banking model has fuelled its client and deposit growth, which was up 31% to R16.67 billion ($940.6 million) in the first half of 2024, with advances increasing by 20% to R5.75 billion ($324.4 million).

Through the shared-value approach, the bank’s clients, which includes over 2 million active accounts, have also accumulated more than R90 million ($5 million) in interest rate boosts and discounts.

Over the past year, the bank introduced, among other things, a new-generation Revolving Credit Facility, and an innovative Home Loan offering that cuts up to 1% off interest rate repayments. With these additions, the bank says it has, in under five years, grown to a completely digital, comprehensive retail bank offering that is attracting over 1,000 new clients a day.

“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,” said Hylton Kallner, CEO of Discovery Bank.

“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.”

The success of Discovery Bank comes on the heels of another South African challenger bank, TymeBank, which has claimed to onboard 300,000 new customers each month and has a revenue run rate of over $100 million per year.

TymeBank’s success has attracted big investments including prominent Chinese technology conglomerate, Tencent, which was a participant in the bank’s $77.8 million pre-Series C funding round in 2023, and also led TymeBank’s $70 million Series B extension raise in December 2021.