The Commonwealth Bank of Australia has launched a number of a new app features which focus on money management, making it a first mover in the Australian market.
The new features aim to help customers manage their money and meet their financial goals particularly on the back of “some worrying statistics,” according to CBA general manager of digital, Pete Steel.
The bank’s data revealed that more than a third of Australians are spending more than they earn each month. The data also found that more than 56 per cent of people would not have enough savings to handle a temporary loss of income and one in three households would be unable to find $500 in an emergency.
“This is a real step change for us and a new era for the bank. We are going beyond just providing products and services and really help customers to adopt better financial habits,” Steel told AB+F.
He said the strategy is a “zero profit and zero growth” motive for the bank, rather CBA wants to help its customers make better choices in managing their money.
“As Australia’s largest bank, we have a role to play in helping our customers achieve financial wellbeing," he said. “In a recent survey, we found 73 per cent of Australians want banks to do more to understand their needs and concerns and 72 per cent want their bank to help them manage their finances in a rapidly-changing world."
From the Lab
The new app features include Transaction Notifications and a Spend Tracker. Transaction Notifications include real-time credit card transaction alerts that give customers insights into their daily spend.
The Spend Tracker provides a month-to-date summary of credit card transactions that are categorised, which show customers where their money is going. The features will be rolled out this month for credit card customers and later in the year for debit card customers.
The bank is also triallling a number of other initiatives in the CommBank Labs, including a savings challenge which compares a customer’s current transaction account spending against their average for the prior three months so that they can track and improve their savings over time.
A ‘savings jar’ is another initiative being trialled, which allows customers to set aside “pots of money” for unforeseen events by rounding up daily transactions. Customers will have access to this money whenever they need it.
“These four functions are a direct response to our customers’ concerns and uncertainties. Each product has been designed to ensure we meet a customer need – from account security, to real-time reminders of your spending habits, to helping you save money and paying your bills on time,” Steel said.
A first mover
According to global research firm Forrester, while Australian banks have done well in terms of offering functional mobile banking features, they have lagged behind in offering money management functionality in their mobile banking.
“Globally banks are moving beyond the traditional offer of transactional banking. They are now helping their customers with managing their money and financial goals. It’s now about driving deeper customer engagement,” Forrester analyst Zhi-Ying Ng said.
“We have not really seen this trend in Australia until now. The features offered by CBA has made the bank a first mover in this market.”
Ng also highlighted the broader issue of trust that banks are now grappling with in Australia.
“The current media focus around issues of trust and culture in banks has not portrayed the sector in the right way. Offering features that go beyond products and services should regain trust and drive a better relationship with customers," she said.
RFi Group data indicates amongst Australian’s using mobile banking apps that only 10 per cent were aware of financial health tools being available for their phones. Furthermore, amongst this 10 per cent only 45 per cent were satisfied with this app feature. These figures suggest there is plenty of scope to spread uptake and improve on existing financial health tools.