By warning customers that the cost of automatic digital subscriptions has risen, and breaking out expenditure on discretionary items like gym memberships, CBA put some pressure on digital media players and other service providers by forcing customers to consider whether they’re getting value for money.
“We are highlighting some of those things, so customers can ask the question, are they being responsible with their money?” Mr Steel said.
The new CBA app could also force governments to pay out more to constituents, after a trial identified over 40 rebates CBA customers in NSW and Victoria were entitled to, triggering more than 100,000 claims. “We are going to be scaling this up from 42 rebates [in the trial] to over 250 rebate types across the country,” Mr Steel said.
The notifications system is already putting pressure on CBA’s own non-interest income, as investors prepare for the bank’s full-year profit results next Wednesday.
CBA has said it will lose $415 million in non-interest income a year due to its fee alerts to credit card customers telling them payments are due. The bank declined to elaborate on Wednesday whether notifications could go as far as recommending customers cancel a credit card entirely if the product were deemed unsuitable.
CBA has pre-released digital customer numbers a week ahead of its results briefing, with active digital users up by 500,000 over the past financial year to 7 million and app users growing by 600,000 to 5.6 million over the year. Digital transactions now make up 63 per cent of total transactions by value, up from 59 per a year earlier.
The bank also said 2.6 million CBA cards had been loaded into digital wallets, where mobile phones are used to make payments, based on data from CBA merchant terminals, far more than 1.4 million for its nearest rival.
Personal data banks
Asked whether advising customers to save more might make it more difficult for the government to boost a struggling economy via stimulus payments, Mr Sullivan said it would ultimately be up to customers to decide on whether or not to spend.
“In the spirit of supporting the economy, having people take prudent use of their credits is a very good thing,” he said. “My sense is most folks want to feel in control of their finances before they go and spend a lot more money. I think it will grow confidence for consumers to go out and do things that are good with their money.”
CBA is open to linking products from other banks into later versions of its app after the open banking regime begins; the app will have functionality to allow customers to manage open banking permissions.
KPMG said in a report released on Wednesday that customers are becoming far more aware of the value of their personal data, and banks have an opportunity to become “trusted personal data banks”.
With neobanks like Volt being awarded a licence by the prudential regulator and preparing to scale, and overseas player Revolut launching in Australia, CBA hopes it can use its scale to hold off the threat.
“We have large data sets, which is definitely a huge competitive advantage globally for anyone who can put AI over the top of data and personalise experiences in this way,” Mr Steel said. “In some ways this was inevitable because, to our purpose, if we don’t do this we are not doing the best job for our customers.”
CBA is continuing to develop security features. The next incarnation of the app will introduce biometric checking where CBA will tap the government passport database to check users’ faces.
CBA is also making a push into digital identity as a service. After a senior Mastercard executive told The Australian Financial Review Innovation Summit Australian developments were being closely watched in the United States, Mr Steel said major banks have a role to play in any regime and “it’s a space we want to solve.”