Launching Platforms for Personalized, Behavioral, Customer-Centric Engagement in Banking and Insurance

Discovery Group Recognized a Need to Focus on Clients’ Behaviors and Worked with SAP to Develop Innovative Solutions

by Esther Shein, Contributing Writer, and Lauren Bonneau, Senior Editor, SAPinsider

South Africa-based Discovery Group, which focuses on incentivizing better health, has recently extended the focus of its offerings from encouraging clients to be responsible with their physical health to improving their financial health too. Discovery Limited, which started out as a health business in 1992, has grown to include a number of member companies, such as Discovery Health and Discovery Vitality, with Discovery Bank (launched in March 2019) as the latest addition. While the different companies’ focuses may vary, they all share the same core purpose of making people healthier and enhancing and protecting people’s lives.

On the insurance side of the business, Discovery Health found a distinct way to incentivize healthy behavior. According to the World Health Organization, 70% of deaths worldwide are caused by noncommunicable diseases, such as cardiovascular and respiratory diseases, diabetes, and cancer. These diseases can often be attributed to behavioral factors, such as lack of exercise, smoking, drinking, or other poor health choices. Through its Vitality brand, Discovery Health rewards its members for their healthy living choices with a unique incentive program. By living a healthy lifestyle, members’ claims costs come down, doctor visits are reduced, and hospital stays are fewer.

“Insurer costs can be reduced while innovation thrives, providing policyholders with a more personalized healthcare journey and better healthcare outcomes,” says Vitality Health International CEO Dr. Jonathan Broomberg, regarding the widespread adoption of the company’s shared-value model. “Ultimately, society can benefit from an improved healthcare system and healthier communities.”

On the banking side of the business, Discovery Bank — the self-described “world’s first behavioral bank” — aims to treat each client individually with personalized interest rates and banking offers based on an individual’s behavior, such as paying bills on time or saving money. Between its launch in 2019 and March 2020, this behavioral bank has grown to almost 85,000 clients and 200,000 accounts in South Africa.

“There was a quest to find something different with the richness of the data and experiences we had accumulated,” says CIO of Discovery Bank Jerome Frey. “In general, if you behave well in your private life, there’s a lot of correlation with your financial behavior. That’s our differentiator.’’

Clients are also tired of being treated like numbers, with no consideration of their circumstances. As part of the desire to set itself apart, the bank came up with a set of behaviors to help clients: reduce debt, improve short- and long-term savings, build assets, insure adequately, and retire well. To reward clients who meet certain criteria for these behaviors, the bank developed a number of incentives, including up to 75% off flights and healthy food, up to 50% off healthcare products, and 100% reimbursement for gym memberships.

Discovery Group looked to partner with SAP to provide its members with personalized, behavioral, customer-centric engagement. This article focuses on the support this partnership provides for Discovery’s banking and health clients.

The Need for Speed in Banking

Discovery Bank aims to fully onboard new clients in five minutes, conduct instant balance transfers, and provide next-day credit card delivery. That required integrating a complex architecture of multiple systems. “We’re a fully real-time bank, which is very important for us. We onboard clients in minutes through an online platform, 24/7,’’ Frey says.

“Millennials want instant gratification and are willing to just go somewhere else,” he continues. “You just want to be on the same wavelength, so we have to be fast, and in-memory computing is critical to that. At the end of the day, it’s all about speed and accuracy and processing data very fast.”

Discovery officials began evaluating various software solutions in 2016 and chose SAP software in January 2017. The SAP banking platform is an industry-specific platform that enables banks to open transactional and investment accounts, apply for loans, process real-time payments, and perform other services, all accessible through a mobile device. SAP Customer Relationship Management (SAP CRM) and the banking platform aim to help organizations create a contextual understanding of their customers in real time, deliver a relevant customer experience, and sell more goods, services, and digital content across every touch point, channel, and device.

“Today, all of the back-end systems powering the bank are SAP systems, which are highly configurable,” Frey says, noting that the company started with a limited line of retail banking product offerings when launching Discovery Bank. This included a fused transaction and credit card account where clients can accrue Discovery Miles — either standalone or in a suite with a choice of different fee structures — in addition to unlimited free savings accounts.

Once a banking relationship has been established, Discovery focuses on deeper product offerings. If clients want to convert their Discovery Miles to cash in any of their Discovery Bank accounts, the transaction will occur within minutes, according to Frey. “It’s amazing how the world is getting faster and faster … and what we can do with our systems,’’ he says. “For us, speed and ease of use is everything. Other banks are far from doing this.”

The intention is to grow the range of products over time to include, for example, foreign currency payments and deposit accounts in foreign currency. Frey says, “There’s a lot we can do by simply using what we have but digging deeper into SAP’s capabilities, and we can release new products literally within months or weeks — as fast as our back-end systems can implement them.”

For more details on some implementation challenges that Discovery Bank overcame successfully and its collaboration with SAP, read the sidebar at the end of the article.

A Unique Way to Incentivize Healthy Living

In August of 2019, SAP announced a partnership with Discovery Health to offer a unique, all-inclusive, co-developed health insurance solution, referred to as the Intelligent Healthcare Enterprise platform, which is a mix of SAP Cloud for Insurance and solutions built by Discovery. This customer-centric engagement platform combines data-driven insights, insurance solutions, and healthcare products enabled by SAP technology to allow health insurance businesses to transform into intelligent healthcare enterprises.

Where traditional insurance involves simply paying clients after they experience a loss, the future of insurance, first and foremost, protects clients and focuses on innovative ways to develop solutions, mobile apps, and other offerings that meet the needs of a growing and aging population.

The Vitality Health program transcends the traditional insurance model by improving the customer experience through lifestyle engagement and rewarding members for their healthy living choices through its innovative rewards program and incentives.

“Innovation is something constant; it is in our DNA. There’s a huge amount of effort and thinking that goes into product design and development, but you can only make it a reality once you have the entire organization able to turn a wonderful idea into a product that you can sell and service successfully,” says Maia Surmava, CIO at Discovery Health. “That’s why I believe it’s important to focus purely on becoming a truly agile organization — one that can quickly bring a brilliant idea to the market effectively — and to be able to implement change as fast as possible.”

The new Intelligent Healthcare Enterprise offering combines Discovery Health’s shared-value insurance approach and expertise with SAP S/4HANA capabilities to provide a fully integrated, data-driven platform. This platform includes a rich data layer, omnichannel customer engagement, and a best-in-class insurance offering, which includes personalized benefits management, claims processing and policy administration, disease management, care coordination, and healthcare and wellness elements.

“Customer experience is critical for us. We put lots of focus on making sure we enable seamless journeys for our members,” says Surmava. “The healthcare ecosystem is very fragmented and complex inherently. It can be very confusing and difficult to navigate. Putting clients at the center and delivering delightful personalized experiences requires thinking beyond the initial product launch.”

Intelligent insurers will ultimately follow the example of Discovery Health and place clients at the center of a service network that is focused on health, wellness, and loss prevention, and that delivers a personalized healthcare experience and better healthcare outcomes. A proven way to achieve that goal is by transforming for success with a digital hybrid product delivery enabled by SAP Cloud for Insurance.

What’s Next?

Looking ahead, on the banking side, Discovery Bank will be expanding its use of the SAP S/4HANA platform in the near future, now that Banking Services functionality has been released, according to Frey. Externally, plans are under way to facilitate family banking across family units. “We want to provide banking offers for the entire family, which will be quite innovative,” he says. “You can share whatever you think is appropriate with your family members: various statements and lines of credit and what you want and do not want the people in your family to have visibility into.”

On the insurance side of the business, Discovery Health will continue to revolutionize the health insurance industry and ultimately help improve the quality of healthcare across the globe. It will constantly seek new ways to increase quality of care; reduce costs; eliminate fraud, waste, and abuse; improve the customer experience; and develop more innovative products.

Sidebar: Overcoming Integration Challenges and Working with SAP

The appeal of working with SAP was “the concept of banking in a box,” according to Frey, however, starting Discovery Bank was not without its challenges. Once Discovery Bank had its customer relationship management (CRM) and back-end systems in place, IT focused on configuring its desired product range. Within an incredible 10-month period from contract execution, it was able to integrate the SAP banking and payment engine into the South African National settlement systems. Simultaneously, Discovery Bank and SAP worked together to expand the banking platform to cater for the processing of credit cards.

Issuing certification into VISA’s global credit card network was achieved in the same time frame, which was an incredible achievement highlighted by many card experts worldwide, according to Frey. Then the bank quickly started piloting its systems by opening customer accounts to a restricted number of friendly customers. “We however underestimated the complexity of designing good, rich but easy-to-use mobile front-end systems,” he says. The transactional nature of the systems went smoothly but creating “a smooth and ‘wow’ offering” for the customer onboarding platform was harder.

The integration of the front end took longer than IT initially anticipated, according to Frey, because of the intricate number of external systems involved; these included biometric platforms, a link to the South African Home Affairs citizen ID systems, sophisticated security and document scanning solutions, and credit-vetting and other essential technologies, such as anti-money laundering.  

Being a credit card issuer presented another challenge because of all the steps in the supply chain: the bank collects the necessary data, makes a suitable offer, and following the acceptance by the customers of the terms and conditions, opens the account, and then integrates the generation of plastics with third-party card manufacturers and couriers who deliver the cards as the bank provides 24-hour deliver plastic. Virtual cards are also available through platforms such as Samsung, Garmin, etc.

As highlighted above, Frey’s initial concern related to migrating across over 350,000 credit cards (that Discovery had through a joint venture with another bank in South Africa) and processing their transactions on the SAP system. “At that time, SAP’s banking platform did not allow for any credit card processing; the SAP model was premised on banks relying on card processing specialists to manage their card portfolios on their behalf,” he says. “And that model simply wouldn’t work for us — we wanted SAP’s systems to process the information.”

Frey says he was impressed at how fast SAP sprang into action and incorporated an issuing credit card management suite into its banking services platform. “They took the challenge on and listened to our requirements, documented them, and built into their banking services a credit-card engine capability, which was delivered to us and tested in record time, and we implemented it,’’ he says. “We bet the farm on the SAP system, and if that capability hadn’t been forthcoming, we probably would have had to implement another solution, not knowing if this would be delivered. The pressure was on SAP which rose to the challenge, and the story ended up well.”