An AI-powered ‘customer co-pilot’ providing Commonwealth Bank accountholders new ways to interact with products plus a growing list of financial, budgetary tools and offers is on its way as the big four bank cranks up efforts to reimagine the world of banking.

During the CommBank ‘Reimagining digital’ event in Sydney on 29 November, the banking giant provided detailed updates on efforts to achieve stickier customer relationships through value-oriented services and digitisation. Capabilities employed to do that stretch from personalisation to app capabilities, data utilisation, value and monetary offers and discounts, better access to financial literacy insights and learning tools.

Sitting at the centre of efforts is CommBank’s customer recognition program, CommBank Yello, which acts as mechanism for providing existing customers with personalised benefits and offers. First unveiled 18 months ago, CommBank confirmed this week it’s expanded access to Yello to 8 million customers and has a pot of $400 million of value each year on offer.

“Our strategy is underpinned by deep, customer relationships where we seek to build trust over time and deliver real value for our customers,” said CommBank CEO, Matt Comyn. “The frequency of engagement, which continues to grow in a digital world, enables us to build even higher quality, more personalised, relevant experiences for our customers. This of course enables more differentiation, reasons to choose CommBank to bank with, and enables us to build the most rewarding experience for our customers.”

During presentations, group executive of retail banking services, Angus Sullivan, said it’s about creating an environment where CommBank can put unique, distinctive value on the table for customers and rewarding them for their relationship with the bank.

“We’re moving away from a product-by-product approach to meeting customer needs and bringing a family of products together – it could be Kit [learning app], StepPay [buy now, pay later tool], CommSec [investment platform]– as well as lot of partners, such as Melbourne-based More Telecom, which has proven a successful partnership for us, plus Holla on insurance,” he said.

CommBank Yello: Customer recognition on steroids

The commercial ambition behind CommBank Yello is to build day-to-day engagement transactionally and from a payments perspective. Sullivan highlighted “payments and digital primacy” as the two main drivers for relationship building activity.

In the past month, CommBank has had 1.5 million visits to its Yello hub. In total, 55 million offers have gone out, $2.4m in cashback has been given to home loan customers, and points are being boosted for 15,000 Smart Award card holders. On Black Friday (Friday 24 November 2023), 29,000 Yello program customers activated a shopping offers on a single day.

“It speaks to enormous engagement with the CommBank Yello program,” Sullivan said. “Many customers have been with us for a long time and are looking for ways for the bank to appreciate their loyalty. We’re looking at ways to recognise them more effectively and build a deeper relationship with them.

“At the heart of what we are trying to achieve is build greater transactions through that digital engagement, primarily in our transacting customer base.”

CommBank Yello qualifies eligible customers through a tiered recognition program. At the lower end is Everyday transaction accountholders with at least five transactions going through them. The critical mid-tier is the ‘everyday plus’ segment, or customers who have high-quality transactional relationships and are doing 30 or more transactions per month. Then there’s the home loan segment for those who fit the everyday plus category but also have a home loan with the bank.

For each level, CommBank presents a tiered hero offer at the top of its app, such as 40 per cent off a More Telecom plan. It also shares information about activities customers need to maintain to keep that Yello status active every month. Notably, many of these tailored offers are being powered by AI capabilities tapping into the 157 billion data points CommBank’s centralised customer engine is working with.

Then there are all the different product benefits on hand, from prize draws to discounts on home insurance including 10 per cent off for all Yello qualifying mortgage customers, cashback on monthly mortgage fees, property reports and insights, bonus points on the credit card and third-party partner offers such as discounts for The Iconic and Disney+ as well as 12 months free Kit app membership.

CommBank is now working with 75 partners on 175+ offers, including Airbnb, Amazon, The Good Guys, Myer and The Iconic.

CommBank isn’t the only bank to buy an offer-based platform: ANZ, for example, owns Cashrewards. But Sullivan said there’s a material difference between the two approaches.

“We want to connect the value and offers – the discounts – back to encouraging customers to build a relationship with us holistically,” he said. “Lots of players are saying, join up to our website, do X or Y and we’ll serve you up offers. There is huge value in that for merchant customers. The opportunity to go to a big business customer, looking to acquire new retail customers, and say we have 9 million CBA customers heavily engaged with us digitally, logging in very often, which gives us a lot of opportunities to put something compelling in front of the customers, has huge value.”

Through Yello, merchants are commonly funding the offer. But Sullivan said CommBank will consider co-funding in a situation where it sees enough value enhancement for customers, or an opportunity to glean more information and data.

Using AI to create a customer co-pilot

Making all this happen is CommBank’s customer engagement engine, first launched in 2015 and recently updated to include 100 gen AI as well as large and small language models, both proprietary and open source. CommBank CIO, Gavin Munroe, said AI is being used to determine the best screen to show customers through the app, which will continue to evolve.

CommBank is actively working to build an AI-first culture and has now trained 500 staff trained in AI. It’s also seen a 50 per cent uplift in AI models deployed by using gen AI tools.

Having arguably gained confidence in using AI to drive personalisation, Munroe said his team is now developing ‘CommBank customer co-pilot’.

In its first iteration, the aim is to provide an intuitive way to communicate with the bank, in whatever interface. This could be to find out interest rates on your mortgages, a credit card interest rate or other information from the bank that’s generic.

“Once we teach it about your perspective, banking habits, point it to your transactional banking and good accounting and budgeting tools, we’ll educate the large language models and plug in small language models so you can ask it ‘what did I spend on my holiday in New Zealand last month’ and it’ll be able to tell you that,” Munroe said. “Or if you have a new credit card, with a 0.5 per cent lower interest rate, how much have I saved over the last seven months?

“It has concepts of financial best budgeting, concepts of your accounts, transactions and can bring that to you.”

CommBank is also looking to make gen AI a co-banker pilot to help customers open a new credit card or move money between accounts.

“The point behind this is we’re exposing capabilities in the bank today but have traditionally sat in silos, and into an interface you can interact with verbally,” Munroe said. “It’ll make it easier to interact with the bank, but it’s also having insights you need to make decisions.”

Munroe expected to launch customer co-pilot early to mid-next year,

“It depends on how much pressure we get from CEO,” he added. “It’s an exciting innovation of where we’re next going.”

Digital and mobile engagement growth

The combination of recognition, rewards and digital capability is appearing to deliver sizeable dividends. CommBank EGM customer engagement and digital, Meg Bonighton, told event attendees it now has 8.1m active app customers, and saw about 1m more customers engage with the app since this time last year. It’s seen 4 billion logins, including 11m logins per day and about 400,000 logins per hour. Peak time is reportedly Wednesday afternoon at 5pm, where CommBank regularly sees 1 million logins to its app.

Predictably, Gen Z are engaging at about twice per day on average. Slightly more surprising is over 65s, who are checking in on average once per day.

One of the big reasons customers check in are the great tools – money management, Bonighton said. CommBank now has about 3m customers per month engaging with tools such as budget planners, bill sense for forecasting bills and more recently, smart savings, to find additional saves or money to swing into a savings account.

“In a world where cost-of-living is top of mind for many customers, these tools are becoming more important to bring insights and help customers feel in control of finances,” Bonighton commented.  

With version five of the CommBank app, the bank has strived to build better discoverability of the 150 features available in the app and introduced universal search. It’s also brought in dynamic navigation with app tiles sitting in the middle of the screen. These are personalised, dynamic and will change based on a customer’s interaction with the app.

“This will start to learn the things I’m interacting with through the app and present those as I land,” Bonighton said. “Importantly, we’re seeing that land well through the metrics. For example, with book an Uber, travel insurance our Credit Savvy [credit scoring service] – many of these are now seeing up to two times more discoverability than before we launched app V5.0.”

Integration is another string to this bow. Integrating CommSec into the app has been a big win for example, and one-quarter of Commsec accounts opened this year have been opened via the app. CommBank has also integrated its More Telecom partnership into its app so its 140,000 customers can view bills and check in what’s happening with their telco experience.

The next cab off the rank will be travel. In May, CommBank struck a partnership with global travel agency, Hopper, whose app has been downloaded by 100 million people globally, helps consumers find prices on 300 airlines, 2 million hotels and 100 rental car companies.

“We will build rich travel experiences in the app to get best experiences and feel confident in travel experiences,” Bonighton added. 

The mega loyalty play years in the making is certainly taking shape.