When Discovery Group decided to enter the world of banking two years ago, the South Africa-based insurance organization knew it needed to do something different to what other banks were already offering. Hence the resulting outfit, Discovery Bank, doesn’t have a single retail outlet and is a fully digital bank. Furthermore, the firm onboards customers within five minutes, including all the legislative steps it has to carry out like KYC and anti-money laundering.
The whole experience is designed to be extremely smooth and mobile-friendly, enabling the bank to add between 1,000 and 1,500 new customers every day, including Saturdays and Sunday. Speaking at the SAP Industry Analyst Base Camp, Discovery Bank CIO Jerome Frey explained:
People onboard after hours, not during hours, which just shows you that people are looking for the bank to be open from 6pm to 6am and not from 6am to 6pm.
The firm also wanted to do something “a bit revolutionary”, launching what it calls a behavioral bank:
Behavioral bank means that we’re really very much looking at your behavior. If you behave well in terms of your health, it's pretty obvious what happens to your insurance - good behavior in health means less claims.
The similar principle applies to banking. If you behave well and manage your financial affairs like the Swiss and the Germans do, you’re clearly in a position where you cost less to the bank, less bad debts, you're then able to pass that benefit back onto the customers for reduced interest rates. So, the better your behavior, the less you will pay on the loan, the better your investment rates will be.
It's a real win-win. What we are looking to do is for you to behave better and manage your money better and become wealthier, and doing so is costing us less.
By last December, less than two years since its launch in March 2019, Discovery Bank had signed up 300,000 customers and was hosting more than 500,000 accounts.
Even though the bank is up and running and has established a successful customer base so far, Frey is adamant that a bank like theirs won’t survive if it doesn’t innovate every single day:
We just can’t stand still, the days of a bank having a set of fixed products are long gone. We have to analyze what customers are looking for and work out what the appropriate product is and release those very quickly. Because what you find is, the competitors will come up with a new product a few months after you've done so, then you need to be in front and actually predict what they're looking for and actually start launching the next product. So quick configurations of new products based on what customers are looking for is the way that we want to innovate.
To support its original launch and offer the firm a platform to continue to innovate on, Discovery Bank knew it needed a very stable core, and a system intelligent enough so that during the onboarding process, it could assess who the customers are, work out if they are credit-worthy or not, and draw up a line of credit within minutes.
The firm turned to SAP for its technology platform, using the full retail banking suite on an S4 Hana backbone, which was implemented in around nine months to 12 months. Discovery Bank then needed to add the intelligence layer, getting access to the data required for the behavioral aspect:
That is very dynamic because when you open your app and want to see what your interest rate is, and this can change every single month based on the behavior of that customer, we clearly need to have very good data about your behavior, what you’ve been doing, have you met your biggest savings targets. All of that information needs to be jumbled together for us to be able to supply you the best rate, so we need to have access to the data and be able to compute it extremely fast.
We also need to be able to predict your behavior so as you walk around town, we need to be able to know that you're walking in front of a retail store and that retail store will give you specific discounts, but we need to know that you're walking around that store. So for us, the data, accurate data, reliable data is absolutely key.
Also speaking at the SAP event was Swiss-based Bühler AG, which employs 13,000 people worldwide. Its plant equipment and services play an essential role in the global food supply chain, responsible for feeding two billion people daily via its food processing arm, and moving one billion people every day via its automotive advanced materials division. Bühler is focused on developing innovations in food processing for customers like Nestle so they can differentiate themselves, and fully optimizing processes with plant and machine controls.
Vidor Kapy, Head of Application and Technology Management Bühler AG, said:
This is only possible if our backend processes are working properly. What we strive for is to have innovations for a better world, for our customers, and what we focus on is that at the end, there are healthy, safe and sustainable solutions.
Bühler is currently using SAP ECC across 33 affiliates with eight-and-a-half thousand users worldwide all working off a single SAP client. Kapy said:
We always wanted to have worldwide standardized processes, standardized data so around the globe we talk the same language and have the value proposition towards our customers in the same way. We have more than 13 million financial transactions every year, and more than 2,500 customer projects, which we run every year so [SAP] is really our digital nerve system with which we need to keep alive.
Next up for Bühler, which has been using some form of SAP for more than 40 years, is a migration to S4 Hana. The latest technology offers more new benefits and possibilities for the organization, according to Kapy, especially within artificial intelligence and machine learning.
It would be great if we can bring some of our planning topics or routine jobs or some insights into a more automized manner, or bring information to our employees. What I really do not want to have in the future anymore, is that people are wasting their time searching for information. This was always normal in the past, but with the intelligent system SAP has with S4 HANA, I'm convinced that we can more and more bring the right information to the right people so they can take the right decisions proactively.
These technology innovations won’t just impact Bühler and its customers’ bottom lines, they also have a vital role in helping these organizations adopt more sustainable practises, and ultimately protecting the planet. In 2050, the global population will reach about 10 billion people, and food production will need to increase to supply their basic needs. Even today, the food industry uses nearly three-quarters of the world’s water, and a large portion of energy generated comes from food production.
If we help our customers to produce food with less energy, we can really reduce water consumption. With our grain handling, 30% of food from field to fork is being lost because of mismanagement and mishandling. If you could save this wasted 30%, then we would not have such a big problem with hungry people around the world right now.
If we have better digitalized IoT solutions and e-commerce systems, if with our customers and partners we understand each other better about what we really require for the future, then we can really try to work together on those big topics.
Innovation is never just 'one and done'.