Discovery's entry into banking is bound to shake up the industry, particularly because of its plan to "democratise" the way it charges customers interest on their loans. Historically, SA's banks have charged lower-income consumers higher interest rates because they are deemed to be a higher risk than high-income earners, Discovery Life CEO Hylton Kallner said. That will not be the case for Discovery Bank, which is due to be formally launched in March next year. The bank aims to offer "dynamic" interest rates on savings and loans. Kallner said this will be based on a customer's money management capabilities, instead of the traditional model of automatically charging low-income earners steep interest rates because they are "deemed to be a higher risk". "If you're managing your money responsibly and effectively, then you'll be charged the lowest interest rates in the market, lower than the higher-income earner who isn't managing their money prudently," Kallner said at a pre-launch even...
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