Commonwealth Bank unveils AI push in banking arms race
Australia’s biggest bank is betting on continuing growth following a mammoth investment in artificial intelligence, with CBA targeting a continued push into business banking.
Business
Don't miss out on the headlines from Business. Followed categories will be added to My News.
Australia’s biggest bank is betting on continuing growth following a mammoth investment in artificial intelligence, with Commonwealth Bank targeting a continued push into business banking while rivals struggle to tame their internal systems.
Spruiking its AI-powered future on Thursday, CBA pointed to the cheaper cost to service its millions of customers alongside systems that could help combat a rising tide of scams and fraud.
CBA, the $275bn ASX-listed behemoth, said its AI-powered technologies had slashed call centre wait times by 40 per cent, while – in combination with a suite of other systems – scam losses had been cut in half.
Rival lenders Westpac and ANZ are attempting to untangle their legacy systems or roll out new banking platforms for customers, something CBA did almost a decade ago when the bank upgraded its core-banking platform.
After showing off a suite of new AI powered systems within the bank, CBA chief executive Matt Comyn said a further 50 different use cases, which were not revealed, were being developed and used.
“The landscape is shifting,” Mr Comyn said.
“Underneath that there’s a lot of important capability that’s being developed and some of the things that are emerging, I guess on a weekly basis.” Mr Comyn said he could “see the potential” for these new technologies to turn CBA into a more profitable lender or allow spending to be redirected.
CBA is also gambling its hefty upfront investments in AI will pay off in the long run as the cost of the new technologies is spread out over more customers or offset by cost savings in the business.
The bank has already been exploring the possibility of replacing thousands of local call centre staff with AI-powered technologies, offering the lender the chance to redirect investments or bank millions.
Mr Comyn said the rising tide of AI-powered technologies was likely to improve Australia’s productivity but cautioned they would not be noticed in the short term. He said the effect of AI was not going to be seen in the nation’s productivity levels “in the next couple of quarters”.
“It’s not going to happen really quickly, certainly not overnight,” he said.
But he said over the long term, tasks would be “able to be done in a more automated and productive fashion”.
The CBA boss said much of the work on the bank’s AI systems had been done “in-house” by almost 10,000 staff working on the technology. “Arguably there may be 100 years worth of discovery in the next 15 years,” Mr Comyn said. “There’s cause for optimism based on some of the improvements we can all observe.”
CBA has also rolled out AI-powered platforms as part of its fight against scams and fraud, including systems that allow customers to easily contest or resolve payments flagged by internal bank systems.
Mr Comyn said CBA had been mindful of its obligations to ensure none of these AI technologies were “unlawful”.
CBA business banking executive Mike Vacy-Lyle said the introduction of AI-powered systems in the commercial lending arm of the financial giant was reducing the need to hire new bankers.
He said that in the past CBA often had to hire more staff as its relationships with businesses grew, as “they don’t scale well”.
“What we are seeing is we are able to generate more productivity out of the bankers we have,” Mr Vacy-Lyle said.
“As we grow we find we aren’t having to grow on a linear basis our footprint.”
Pointing to the performance of the business lending arm, which now banks 27 per cent of all Australian businesses, Mr Vacy-Lyle said CBA was now the leading bank in the small business, commercial and major client categories, with growth in agribusiness and regional lending.
Mr Vacy-Lyle pointed to a key example of AI use in CBA’s regulatory check-ins on businesses, which had slashed processing time from about 16 hours to just one for many customers.
“I can lend more, I can grow my lending book much quicker. My bankers have got more time to cross-sell and do other things like meet more customer needs and have conversations,” he said.
“Profitability per relationship should improve.
“Client value management, which is basically generating an optimal return out of a particular customer base and meeting their needs inside the bank, will improve.”
CBA recently rolled out its loyalty program Yello to small business customers, with Mr Vacy-Lyle saying the scheme was not about “clipping the ticket” and earning more cash from existing borrowers but instead bolstering the relationship with the bank.
Originally published as Commonwealth Bank unveils AI push in banking arms race
Bega lifts on strength of dairy prices
Shares in Bega Cheese have risen 5 per cent in a week, as UBS said better commodity prices had proved a strong tailwind for one of the country’s major milk processors.
Bensons collapse adds to construction sector gloom
High-rise apartment developer Bensons Property Group is the latest victim of the nationwide crisis dogging the construction sector, entering voluntary administration on Friday.