Announcing the H1 FY ’20 results, CEO of CBA Matt Comyn committed investments in digital transformation strategy to fuel the next phase of growth.
The CBA boss said “A big part of our strategy is delivering exceptional customer service, but also doing with leading technology. And it’s not just about the digital experience, it’s about a real-time and high availability system”.
Also Read: Unbundling the CBA Digital Strategy
The bank’s execution priority is to deliver a simplified bank while becoming the best in digital. Data reveals the impact: A whopping 64% of total transactions (by value) are digital, although a moderate increase compared to the previous year.
Although there are questions on NPS as the benchmark for validating customer delight, Australian financial institutions haven’t shied away from measuring and tracking NPS. CBA claims a Net Promoter Score (NPS) of 36.2 which is 10 points higher than its nearest competition.
“We also recognise there is much more to do on a go-forward basis.”
Unveiling the H1FY20 results, Macquarie Group’s Head of Banking and Financial Services stated Macquarie bank is proactively measuring NPS at specific points. Suncorp also revealed it is tracking NPS to measure client advocacy and customer experience even as executive remunerations are tied to NPS (about 20%).
DIGITAL IS AN INCREDIBLY IMPORTANT PART OF TECHNOLOGY-DRIVEN BUSINESS FOCUS, BUT ACTUALLY, OUR AMBITIONS ARE REALLY MAKING SURE THAT WE HAVE A MODERNISED, REAL-TIME AND VERY RESILIENT TOP TO BOTTOM TECHNOLOGY STACK
Matt Comyn, CEO
Also read: Digital Strategy of National Australia Bank
The CEO acknowledged CBA comes from an advantageous position due to its long focus on back end processes and technology systems than just the digital front end. “We have got a strong history of leadership in this area and some very good assets that we are going to build upon.”
Not surprisingly, the CBA veteran is committed to increasing the pace of innovation and striking partnerships with Klarna to bring “exciting payment propositions” to CBA customers.
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Focus Areas:
Continuing Modernisation
CBA is on a path to reduce the number of apps running on “too much infrastructure”. Of the about 3,500 applications, Commonwealth bank aims to reduce the footprint down by 25%. This is in line with the bank’s strategy of becoming a “simple bank” while embracing the cloud paradigm. A major cloud migration program is underway and CBA aims to achieve about 95% on the cloud.
The Cloud target and trajectory are similar to other banks. NAB is on a tech transformation program embracing cloud while Macquarie bank has targeted 100% on the cloud by FY 22.
Also read: The 3 trends shaping the future of digital banking, according to Temenos
Digitisation with High level of Availability and resilience.
Digitisation is a big theme for CBA with focus on digitising across businesses. Home Lending is now 80% digital end to end using PEXA on the back end. Investments to continue in business underwriting processes.
CBA also has big investments in Institutional banking division – investments in the underpinning infrastructure and systems, everything from the KYC onboarding process to the institutional lending system.
Data Lineage, Quality and Governance
Priority for regulatory compliance means investments in Data and Analytics to fight financial crime. Matt once again acknowledged the strong starting position CBA had alluding to years of tech investments of the past.
Focusing on getting data quality at the source is an important part of data and analytics strategy to not only meet regulatory requirements but also forming a “foundational asset” to build differentiated customer experiences.
People and Partners
The partnerships with Klarna and Microsoft reflect the importance bank has given to local and international partners. The CEO was quick to highlight the progress CBA have made with Klarna. “We have had about 25,000 registrations in less than two weeks”
CBA has been on a recruitment spree to hire tech talent to increase the software building velocity while not losing track of security priorities and costs.
“We need the best people, so best people internally. We also want to work with the best partners, both domestically and locally”.
Melbourne based National Australia Bank has been on a similar drive. The incoming CEO Ross recently highlighted employee delight as one of the top five focus areas for NAB. In a world where talent is critical, banks seem to be making all the right moves to recruit and retain talent.
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