CBA's 25 fintech rollout and $1 billion tech spend

  • By Christine St Anne

The Commonwealth Bank plans to roll out 25 fintechs over five years as part of its new capital business with the aim of delivering specific benefits to its customers rather than “just a return on investment”. 

This was the assessment of CBA CEO Matt Comyn when he announced the initiative on Monday. 

The business branded as x15 Ventures will use the bank’s scale, risk control and balance sheet to build a stand-alone digital business. 

X15 will be a business owned by CBA, with funding provided from the bank’s $1 billion annual technology investment spend, with its own delivery model, and a dedicated management team

The bank said its 15 million customers stand to benefit from a range of services the ventures will develop and provide. 

The recently announced Klarna tie up was one of the services rolled out from x15. The bank also announced the launch of Home-In, a digital home buying concierge, and Vonto, a business insights aggregation tool. 

Acknowledging that other banks had similar businesses that supported startups – NAB Ventures and Westpac’s Reinventure fund- Comyn said the bank wanted to position this initiative “quite differently”. 

Here the bank will integrate the fintechs it backs with its business – the Klarna deal a case in point where the buy-now-pay-later app is integrated into the bank’s CBA digital app. 

“We feel that integration is actually really good for our customer,” Comyn said. 

“When you bring together the best and the largest digital customer base with a very strong payments proposition [Klarna], it’s a very compelling way to go to market.”

In the case Klarna it was a 50:50 tie up but Comyn added the bank will be experimenting with different models. 

“But we like the idea of building out digital propositions that have the customer benefit at the heart of it rather than really just trying to get a return on equity on our investment.” 

X15 will be headed by Toby Norton-Smith. 

Norton-Smith said the venture businesses will apply a “razor focus on customer problems” in developing solutions. 

Home-In will be helping people with buying their homes through better processes while Vonto will help SMEs better manage their business by using good data and analytics.

According to RFi Group data, communication during the application and the speed of the process are pain points for borrowers. 

The bank will partner with Microsoft and KPMG High Growth Ventures to deliver X15 Ventures. Microsoft will bring its platform and engineering capability to the initiative, while KPMG will provide advisory services.

Microsoft already has a 20-year partnership relationship with CBA. 

“I believe that the next wave of major technology breakthroughs will come from partnerships such as this, bringing together our deep technical capabilities and absolute clarity about the business challenges that need to be addressed,” Microsoft Australia Managing Director Steven Worrall said.