Commonwealth Bank of Australia aims to have digital processes in the bank that are not just benchmarks for banks but for global businesses in general:
Commonwealth Bank of Australia has focused its digital strategy to offer its customers with the best digital experiences of any company globally. The bank’s Chief Executive Officer Matt Comyn aims to make the bank not just a benchmark for other financial institutions in terms of digital efforts, but he wants the bank to be compared with the best digital experiences one gets from any business in the world. He has also gone on record stating the bank’s investment in technology, including data, machine learning, and artificial intelligence, is giving it unique insights into each customer’s individual needs and that the bank’s understanding is that customers want more control over their financial affairs, more confidence to achieve financial goals, and an ability to manage all of their financial life in one place. And towards this, the bank is preparing to build, develop, partner, and invest in new services it can integrate into its CommBank app.
The bank’s digital efforts have reached such a stage that now customers judge it not against direct competitor banks but digital giants like Amazon and Netflix. It has proposed to invest $5 billion over the 5 years starting from 2019, to improve digital capabilities and rebuild consumer trust.
Today, 71.5% of all transactions (by value) of the bank are digital, up from 63.9% 2 years ago.
UNIQUE SUPPORT TO FINTECHS
The bank has made substantial public investments in its digital capabilities. It proposes to help establish 25 new fintech-focused businesses over the next 5 years. The investment is in addition to its $1 billion per annum budget for investment in technology. To have a more involved approach, it has created a venture-scaling facility called x15ventures, rather than have an internal venture capital division for appropriate investments. x15ventures will directly invest in and develop these fintech firms. To mark the first anniversary of its setting up, the bank recently acquired hospitality cloud platform Doshii, which integrates information from multiple food ordering apps into one system that consolidates a venue’s point of sale and back-end processes into one simple platform.
PREVALENCE OF AI
Very recently, Commonwealth Bank concluded a strategic partnership with AI firm H2O.ai to bring in AI in a big way into the bank. H2O.ai’s state-of-the-art AI Cloud will be available to the bank’s data scientists, data engineers, and business users. The partnership is expected to help differentiate and extend the bank’s AI capability to better anticipate customer needs and reimagine products and digital experiences to meet those needs.
The bank’s core digital initiative is the CommBank mobile app. The app is used by 7 million active digital customers and on average, there are 7.4 million logins per day. Apart from being a digital portal for checking and savings accounts, the app is customizable like an iPhone and can be personalized like Netflix recommendations. It can notify customers when their bills are due when suspicious activity is noticed through their accounts or they can see how their spending is for a particular month in comparison with previous months. It also tackles many of the hassles of banking relationships and notifies the customer when a direct debit or subscription payment increases, or if a bill has been paid twice. It can also provide advice on what to do with a tax return.
The app also offers location-based security that allows customers to have, on an opt-in basis, the ability to enable location-based security on their phones. If the bank sees a transaction coming out of Hong Kong, but it knows through the customer’s phone that he is in Melbourne or Sydney, the security features can protect the customer and the banking information.
CUSTOMER ENGAGEMENT ENGINE
The app is backed by a powerful, machine learning-enabled ‘Customer Engagement Engine, which allows the bank to analyze 157 billion data points in real-time across 400 advanced machine learning models. It is delivering about 35 million decisions per day, done in real-time, in less than 300 milliseconds for each of those decisions. This is turn enables the bank to send 3 billion personalized messages to customers over a year. These personalized messages number around half a million each week for overdrawn accounts alone and is expected to save customers over $200 million over the next 12 months.
Using the Customer Engagement Engine, the bank is also able to proactively identify customers who may be impacted by a natural disaster and it can then offer financial assistance and support in a streamlined, timely manner.
The bank’s CEO Matt Comyn has said the bank would continue to invest in its digital and technology capabilities as it seeks to provide customers with the global best experiences. “We are focused on continuing to make progress in our more ambitious strategy – building tomorrow’s bank today for our customers,” he has said, adding: “Reimagining banking through new products and partnerships will support our customers and help build Australia’s future economy, while focused on disciplined execution and investing in digital and technology capability.”
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