Bringing science to the world of banking

For over two decades Discovery has developed the science of encouraging people to change their behaviour – then shared the value of positive behaviour change through powerful incentives and rewards.

This principle of behavioural science to positively nudge people towards behaviours that are good for their health, has now been applied to money management.

On a global scale, Discovery Bank is the first to look at consumer and financial behaviours that place financial wellness at risk. Through its behaviour-change programme, Vitality Money, it’s also the first to help people change these behaviours to earn rewards and ultimately achieve improved financial security.

It’s called behavioural banking and for Discovery Bank, the aim is to offer rewards that go beyond enjoyable freebies. It’s about encouraging good money management to grow generational wealth and financial health for all South Africans – irrespective of income.

Discovery Bank can grow wealth for clients by helping them to save more and pay less on borrowing when they manage their money well.

Discovery Chief Executive, Adrian Gore says, “The results of behavioural banking for clients are profound. They earn the highest rates of interest on money deposited from the first cent in, pay the lowest rates of interest on borrowings, and enjoy boosted lifestyle and travel rewards, all of this underpinned by the best and latest technology.”

The science of managing money

How this is possible despite income levels comes down to behavioural science. Statistical evidence shows that a few key choices people make, determine their quality of life, no matter what their income is.

“We have learnt about the effect of behaviour in healthcare and how to change it. From this, we know that Discovery Vitality members on Gold or Diamond Vitality status have a life expectancy that is on average 20 years more than that of the average insured individual in South Africa. Now, we are applying this same behavioural model to banking. Behavioural banking means that it doesn’t matter how much you earn, but how you manage your money, which the older models of banking did not consider.” says Gore.

“To unlock good banking behaviour, we have worked out that you need to focus on changing your behaviour around five controllable factors – spending less than you earn, saving regularly, insuring for adverse events, paying off property, and investing for the future. South Africans can materially improve their financial position and reduce the risk of not being able to meet their financial obligations by making these changes. Discovery Bank guides clients on how to do it and when you do, we reward you. We have seen that rewards go a long way in encouraging people to make better decisions that benefit them over the long term,” he adds.

Using tech to drive change

The Discovery Bank app facilitates good financial behaviour by showing in real-time, just how financially healthy clients can be. The behavioural system is simple, but its results are tangible. Vitality Money, which is at the centre of the behavioural banking system, measures how clients manage their money and guides them on how to improve.

Based on this, clients can:

• Earn the highest rates of interest on money deposited from day one
• Pay the lowest rates of interest on borrowings
• Enjoy boosted lifestyle and travel rewards; and
• Earn Discovery Miles, a unique rewards currency that monetises all of their good behaviours across health, money and driving

“The Discovery Bank shared-value banking model provides an effective platform to initiate this change. Helping people to make better financial decisions, generates higher savings levels, lower risk and increased wealth and prosperity for society as a whole,” says Gore.

Check how healthy your financial behaviour is with the Vitality Money status calculator. It takes a few minutes of your time to learn about your finances across the five behaviours that determine your financial health. Know how to change it and take control of your finances today – Discovery Bank can show you how.

This article is written and sponsored by Discovery. The Vitality Money Calculator is for information only and does not constitute financial advice. Please consult your financial adviser before making any financial decisions