The big four bank has rolled out a pilot under the consumer data right (CDR) regime, allowing customers to view account balances from other eligible institutions in the CommBank app.
Data is key to the bank’s game plan for the years ahead, with chief executive Matt Comyn revealing CBA is actively analysing 157 billion data points across 400 machine learning models in real time.
As indicated by CBA executives in a media briefing on Thursday (27 May), the bank is using transactional data to build automated tools such as spending insights for 10 million retail customers, which could include prompts to make certain payments and savings or to use short-term loans.
For CBA’s 700,000 business customers, there are plans to use data across transactions and cash flows to form prompts, such as suggestions for loans.
Digitisation is also being looked to as a tool for cutting down on turnaround times and to stay competitive. Mr Comyn commented that an end-to-end digitised lending process for business customers had enabled the bank to write 50 per cent of the SME loan guarantee.
“Certainly, from my perspective, that’s a critical element of our strategy going forward [which] is making sure that we’re very easy to deal with from a customer perspective,” Mr Comyn said.
“We’re automating whatever we can, where possible and right across both for our proprietary lenders and our brokers, where we’ve got the leading proposition in market.”
Michael Vacy-Lyle, group executive of business banking at CBA, echoed the sentiment, commenting “speed of decision and speed of funding is critical”.
“We remain committed to bring that down,” Mr Vacy-Lyle said.
“We’ve seen it through as Matt alluded to, through the government guarantee scheme, that we were able to do that in a matter of minutes, from first interaction to performance, and we’re looking to expand that capability.”
In the business bank, CBA is planning to use its data and visibility of around 30 per cent of all transactions in Australia.
“We have a wealth of data, and we have the opportunity to use this data to offer predictive and contextual insights, insights that are of deep value to our customers,” Mr Vacy-Lyle said.
“We are developing capability to help our business customers predict their cashflow needs and to offer them digital lending, borrowing solutions on the back of these predicted future cash flow requirements.”
Mr Vacy-Lyle also indicated the bank is looking at potential applications of buy now, pay later solutions for business consumers, although it hasn’t “seen any specific requests for it yet”.
New spending management tools tipped as aids for borrowers
CBA has also bought a 23 per cent shareholding in online shopping start-up Little Birdie and a 25 per cent stake in Amber, a subscription-based electricity provider.
Mr Comyn commented the bank is seeking to differentiate its offerings with technology, building out its banking app to include a variety of services and targeting younger consumers.
“We want to be the trusted partner at the centre of our customers’ financial lives, because of the role that we play, the digital engagement, the frequency of that digital engagement – I think that puts us extremely well placed to be able to orchestrate the best overall experience,” Mr Comyn said.
The Little Birdie partnership will connect CBA’s retail and business customers with its shopping discounts within the fintech’s app, which also allows users to compare vendors, find offers on products and to get price drop notifications.
CBA seems to have leant heavily towards payments technology and e-commerce, having also backed the Australian distribution of Swedish buy now, pay later provider Klarna alongside that of StepPay and CBA’s own buy now, pay later product, CommBank Neo.
Meanwhile, the Amber deal will see CBA’s customers offered access to wholesale prices for power, for a flat monthly fee of $15. The provider’s app also generates insights for times of the day when electricity is cheap – suggesting when customers should use more power hungry appliances.
CBA has marketed its partnership with Amber as a way to offer a cost saving to customers, particularly those re-examining their spending in the lead-up to buying a house.
In the coming months, the bank is also rolling out automated budgets – which nominate and suggest budgets for particular categories and can then be adjusted and tracked by customers.
The CDR will also allow the bank to take information from third parties, such as a customer’s payroll or their superannuation payments, for consideration towards digital mortgages, Angus Sullivan, group executive for retail banking services commented.
“One of the insights that we’ve had, as we’ve been really trying to build out the best home buying proposition, is just seeing how much our customers are focused on all elements of their expenditure at the point of applying for a home loan,” Mr Comyn explained.
“It’s probably realistically a time when people re-evaluate some of these service providers when they’re actually moving home.”
The bank has signalled that it is considering partnering with NBN and other service providers, where it can deliver a similar package.
[Related: Financial sentiment at record high: CBA]
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Sarah Simpkins is the news editor across Mortgage Business and The Adviser.
Previously, she reported on banking, financial services and wealth for InvestorDaily and ifa.