The Future of Account Origination Qorus Banking Innovation Awards 2022

Our vision was to create a completely digital and real-time onboarding journey that gave the client the ability to onboard and begin transacting within five minutes, with the lowest number of taps. Other banks can take from 5 to 20 days to register a new account because those banks require clients to submit physical personal documents (KYC documents) or visit a branch. We found innovative solutions to four critical challenges traditional banks face when onboarding a client and ensuring engagement: 1. The need to physically verify a client’s identity and proof of address (this is an international requirement known as the KYC (Know Your Customer) process and it is necessary to comply with anti-money-laundering laws). 2. The need to verify a client’s income and expenses for the purposes of awarding credit. This is a requirement from a risk and a regulatory perspective and is imposed by the National Credit Regulator in South Africa. 3. Creating a simple and intuitive product selection process that helps the client choose the most appropriate product for them, with the fewest number of taps in an app. 4. Engaging a client after onboarding to ensure engagement and utilisation. KYC and physical address verification: To comply with global anti-money-laundering laws, financial institutions must have an adequate KYC process in place, which can physically verify the identity and home address of new clients and assess potential risks by name matching against sanction lists and politically exposed persons. Traditionally, this is done in a bank branch where a potential client’s proof of identification and address are verified by a bank employee. 61% of South Africans visited a branch for verification purposes according to a recent study conducted by BCG and Discovery Bank. Seeing this as an opportunity to innovate, Discovery Bank developed a selfie recognition functionality, which is a proprietary intellectual property digital identification system that allows new clients to seamlessly verify their identity in seconds by simply taking a live selfie. This information is gathered and cross-referenced against The Department of Home Affairs database, a well-established government database that enables us to verify clients' ID in real-time and continuously screen clients against global sanctions, politically exposed persons lists, and multiple other watchlists to ensure full KYC compliance. In a South African first, we designed and built a home address verification system that makes use of the GPS sensors embedded within a client’s smartphone to verify their home address. This is especially relevant in developing countries, where many consumers may not have access to utility bills to verify their place of residence. This allows us to service underserved communities. Credit process: Traditional banks are faced with various challenges when verifying a client’s income and expenses, some of which are finding reputable sources with accurate information, obtaining documents with valid time frames and delayed document submissions from the client. By integrating the Document Exchange Association (DEA) (a non-profit Industry Association whose primary focus is to process the secure transfer of bank statements from the client’s transacting bank) to the bank where a client has applied for credit, we are able to automatically retrieve documents on a client’s behalf to verify their income. This ensures that all documentation is sourced from a reputable source and is accurate and valid for the specific time period. Data received is verified in real-time and inputted into our affordability calculators to determine a client’s ability to repay credit allowing a client to be approved for credit in just a few minutes. Simple and intuitive product selection process: The Discovery Bank app recommends the ideal product for each individual based on four questions and utilising multiple other factors such as their credit score and use of existing Discovery insurance products. The app shows all the key features that a client needs to make a decision. In addition, a client can also compare their current bank account to a Discovery Bank account on our website. The website compares account fees, interest rates, rewards and benefits. Post-onboarding engagement: Once a client has been onboarded, their accounts are immediately available for use. Clients can add virtual cards and begin transacting immediately. In addition to this we use machine-learning algorithms to provide clients with a personal coach to help the navigate their app, learn about features, and get more engaged through personalised push notifications that adapt to client’s behaviour. Outcome: Our completely digital account origination journey has proven to be more secure and efficient than traditional and hybrid approach. This allows new Discovery Bank clients to open an account from any location at any time of the day in under five minutes. We have seen that almost 50% of clients that download our app open their accounts after-hours and on weekends. This simple and intuitive experience has resulted in Discovery Bank growing to 1 million accounts since launching in 2019, in August 2022, Discovery Bank onboarded 1,000 clients per day on average. The bank has the fastest growing credit advances in South Africa (Discovery Bank has a 7% market share of new credit card business), and the lowest credit loss ratio of under 2%. The post-onboarding journey gives clients a personalised journey to engaging with Discovery Bank and utilising the features, resulting in more engaged clients. Average NIR per client is above the average of the 4 incumbent Banks in South Africa.