Banks discover the times are a-changin'

When journalists and publishers sit around a fire and discuss the future of the craft and its business case, it's both an exciting and rather daunting discussion.

In as much as the information age has led to an explosion in the size of audiences, the test is how to get revenue to at least move in the same direction, if not soar to the same degree. It's something even leading publishing houses such as the New York Times Company are grappling with, sometimes clumsily.

Disruption agents abound and in garages across Silicon Valley and locally as well, someone's figuring out the next frontier.

The media industry has long been at the cutting edge of this information age, or at least the impact of change has been most clearly displayed in the health of the world's leading media players.

Executives across other industries are increasingly facing the same questions about the future.

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Financial services - everything from insurance to banking - are in the middle of a global vortex.

While the idea of having a personal relationship with your trusty bank manager has long died, there's much more to disruption in the banking sector.

In recent years, the big four - Standard, Barclays Africa (Absa locally), Nedbank and FNB - have had to deal with the growth of Stellenbosch upstart Capitec.

Over the next few years, they will face what could be an even bigger threat: Discovery's foray into retail banking.

I am not one for dishing out plaudits, but in Adrian Gore the company is led by a man famed as a disruptor, a reputation established when he and Barry Swartzberg left Liberty Life to start Discovery Holdings 24 years ago. Today, the market cap of the firm is more than twice that of their former employer.

In his sights now are the established banking giants and should he get that licence within the next two years, it's an industry set for a dramatic shake-up.

With its 54% share of South Africa's medical aid market, Discovery already has a potential customer base of 2.69million people. Some 253,000 people already carry its credit card in a partnership with FNB.

Imagine what Discovery could do with the data it already has, if it were to also gain access to clients' salaries .

Through the Vitality programme it can already track the activities of members such as how many times they go to gym and what foods they eat.

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Combine that with the information Discovery could garner about your late-night activities, be it a visit to McDonald's or a few hours at a local watering hole, and it will get an even clearer picture of just what physical state a client is in.

If the data paints a worrying picture - say for argument's sake the possibility of imminent death - a decision on a car loan or a mortgage becomes much less of a gamble for the bank, I would think.

Through its insurance division, Discovery is already accessing much more data about its clients. I am one of the unlucky fools who have placed Discovery's driving monitor in my car. My heavy foot has resulted in many an SMS warning me of my folly.

Pretty soon the company will be telling me when to buy new tyres.

A Discovery bank is potentially a monster in the making. Seeing how its rivals respond is going to be an exciting ride.

Maybe one of them, or a mobile operator with loads of cash, should just buy that data now already.

E-mail derbyr@sundaytimes.co.za or find him on Twitter @ronderby