In response to these trends, CBA in particular has invested heavily in technology and data systems that it hopes can give it an edge over rivals in winning transaction account customers, who are critical for banks in building a long-term relationship with customers.
Chief digital officer Pete Steele said the bank’s customers had an average of 1320 transactions a year go through their accounts, which was “a lot of noise to keep track of.”
A lot of money goes out with regular subscriptions, so we’re challenging customers, just to show them, are they spending the right amount, are they aware of it all
CBA’s Pete Steele
He said the new app would be able to tell customers how much they were spending on subscriptions such as streaming services, online news or gym memberships, and it could alert them when these services raised their prices.
“A lot of money goes out with regular subscriptions, so we’re challenging customers, just to show them, are they spending the right amount, are they aware of it all?” Mr Steele said.
Mr Steele said the app would also highlight ways to avoid bank fees and changes, such as by paying credit card balances in full and on time.
It will also ask customers in advance if they want to be alerted when they receive a tax return.
Once the tax refund had arrived, Mr Steele said the bank could send a real-time alert “to say ‘hey we suggest’ – it’s always the customer’s decision – ‘we suggest you think about paying off some of that debt that you’ve got, or investing it for a rainy day’.”
Angus Sullivan, CBA’s group executive for retail banking services, said the idea behind this was to provide “guidance”, as opposed to formal financial advice, which is tightly regulated.
In relation to the tax return example, he said the bank was looking at how it could help consumers make a “good choice” about what they did with the money.
“Maybe there’s a credit card that you want to take some balance off, maybe there’s something overdue that you need to pay. If you’ve taken care of that, maybe you want to think about saving some of it. Let’s put it in something that’s going to get some interest for you,” Mr Sullivan said.
Tax rebates for the the 2018-19 year could be a significant source of stimulus for the soft economy, though this effect may be dampened if people use the money to pay down debt or increase their saving, instead of lifting consumption.
Mr Sullivan stressed it would be a “lightly guided” experience, and customers would ultimately still make their own decisions about what to do with their money.
“In the spirit of supporting the economy, having people make prudent use of their credit’s a very good thing,” Mr Sullivan said.
CBA will next week release its full-year results, with market analysts tipping a result of about $8.6 billion for the year, after a second half of slowing loan growth and pressure on industry profit margins.
CBA, which has 7 million customers using its digital banking systems, also underlined rapid growth in “digital wallets”, saying there were 2.6 million CBA cards that had been uploaded to smart phones, which is 1.2 million more than its nearest rival.
Clancy Yeates is a business reporter.