CBA gets momentum on the MFI front

  • By Christine St Anne

More younger customers are choosing to bank with the Commonwealth Bank as their main financial institution with CEO Matt Comyn saying that this important metric “goes to the heart of its ‘everyday banking proposition”. 

Comyn made this assessment at both the analyst and media briefing on Wednesday as the bank announced its first-half result

According to the bank, CBA leads its peers on MFI with 35.5 per cent of customers nominating the bank as its MFI compared with its peers

“We look at the MFI share closely. There has been a continued strong uptick particularly from the younger customers. The growth has been very pleasing,” Comyn said. 

CBA’s MFI engagement is primarily around its transaction accounts and Comyn is seeing many of the bank’s customers use these accounts to deposit their salaries. 

“It is a good indication that customers are using these accounts as their primary account and we have seen growth particularly in the 18 – 34 age categories. 

It comes at a time when the neo banks have launched into the Australian market with their digital offerings particularly in transaction accounts. 

For Comyn, investment in the bank’s digital capabilities and initiatives like the recent Klarna tie-up are part of the bank’s aim to “have the best everyday banking proposition” by helping customers transact digitally. 

Its recent launch of X15 Ventures is also part of the bank’s strategy to increase its digital focus, a priority Comyn highlighted in the bank’s innovation strategy.

Morningstar bank analyst Nathan Zaia, however, does not incorporate any upside to earnings from the Klarna or X15 initiative. 

“These initiatives are welcome though, ensuring the bank both mitigates a reason for customers to switch to a more digital savvy feature packed offering, and potentially attracting new customers,” Zaia said. 

RFI Group data has also revealed that banks may need to do much better on the MFI front around savings transactions. 

The data shows that MFI used to be a top driver of choice for primary transaction account providers however now the research is highlighting other reasons that are becoming important – such as mobile banking but also fee waiver and trust.