What you need to know:

• Yello loyalty programme launched, alongside D2C no-fee mortgage platform Unloan.
• Yello aims to personalise loyalty to six million banking customers, with tailored rewards, cashback and discounts powered by decisioning engine.
• CBA already has over 3.5 million members of its card loyalty programmes, Yello would put it further ahead of banking competitors: 6m loyalty members would put CommBank in the top 10 loyalty scheme operators in Australia.
• CommSec share trading service now also in-app.
• New kids app trial underway.

Personalisation push

CommBank has outlined the next steps in its plans to build out a major loyalty platform across its banking services as it bids to ward off global platforms and incoming changes to data privacy rules by regulators and big tech.

CEO Matt Comyn updated the firm’s strategy today.

“We seek to be the trusted centre of our customers’ financial lives, using technology to build the best integrated and personalised digital experiences to suit all the ways our customers interact with us. Our strategy is to broaden and deepen our distinct and highly differentiated proposition to give customers more reasons to bank with the Commonwealth Bank.”

Loyalty play

The ‘Yello’ rewards programme, called a ‘recognition programme’ by the bank, “better rewards customers with specific, personalised benefits and offers”. The plan is to tailor rewards "including discounts, cash backs and additional services and tools" depending on the customer, the products they have with CommBank, and how long they have been with the bank.  It will initially be available to homeowners, but will rollout across CommBank’s six million retail customers later this year, significantly expanding its loyalty footprint beyond the 3.5 million-plus members of its card loyalty programmes.

Rival ANZ operates a cashback scheme via Cashrewards, in which it holds a 19 per cent share. The firm is also bringing merchants into its online walls and bidding to drive personalisation and gain customer consent for adjacent services.

CommBank has been making strategic investments in retail platforms, energy companies, home loan and property start-ups and related services over the last three years via its X15 ventures unit.

It is now connecting those services via API into its banking app used by 6m retail customers. As CommBank builds out that ecosystem, a major loyalty play is taking shape.

“The end game – you framed it as a loyalty platform – is exactly that,” X15 Managing Director Toby Norton-Smith last year told Mi3.

“CommBank is premised on predominantly serving banking products. But in an increasingly digitised and competitive banking environment, the competitive set is not just the other banks, it’s global tech.”

The move comes as some of Australia’s other major advertisers rethink loyalty strategies – as are smaller brands – in a bid to retain and acquire customers and gain permission to use their data in return for explicit value. 

Alongside CommBank, retailers like Woolworths and Coles, and payment schemes like Visa, MasterCard, Amex are creating walled garden mega-loyalty plays that use first party data to bring value to clients and customers, and work in competition to the likes of Alphabet and Meta. The banks and card providers are also fearful of being disrupted by Apple on payments.

Bringing six million customers into the programme would put CommBank within the top ten loyalty providers in Australia: Qantas Frequent Flyer has around 13 million members; Woolworths' Everyday Rewards has around 12.5 million members; Velocity Frequent Flyer has around 9.8 million members; Flybuys has around 8.6 million members (though these are households); Priceline Sister Club has around 7.5m million members. 

Mortgage disruptor

CommBank’s official launch of Unloan – a cloud-based 10-20 minute direct-to-consumer mortgage service which will crunch customer data to provide loans under $3m for customers with higher amounts of equity – adds to that mix. It promises no fees and to provide a rate discount every year. While the service cannot be managed via the CommBank app for now, the bank will use the app and its broader walled garden to promote the service to those deemed relevant, with decisioning powered by its Customer Engagement Engine.

The bank is also bringing the CommSec share trading service – used by more than 1.5m customers – into its app.

Meanwhile, a 5,000 trial for the Kit app, designed to help kids manage their money, is now underway.