Commonwealth bank of Australia is to step up its investment in technology, building a $5 billion digital war chest to cater to growing demand for online and mobile services over the next five years.
The spending pledge comes as CommBank reports a slump in profits due to the massive costs involved in rebuilding the bank following a damning Royal Commission inquiry. The Bank has earmarked $918 million to try to win back the trust of its customers as well as an additional $358 million on risk and compliance programs, leading to a $1.2 billion charge on full year profits.
The bank is also investing heavily in technology as it prepares for the arrival of a phalanx of new online and app-only neo bank entrants.
The number of digitally-active customers has grown by 500,000 on a year ago, according to the group’s latest financial results. Of those people, 5.6 million are now monthly customers on the CommBank app, version 4.0 of which has just been unveiled showcasing greater personalisation and customisable home screen features.
The number of digital transactions has also hit new highs - at 63% of total transactions by value. Digital logons total 7.4 million per day.
Unveiling the Group’s annual financial results, CEO Matt Comyn said CBA will step up its approach to customer-led innovation with a $5 billion investment over the next five years.
The first fruits of that spending were evident yesterday as the bank pumped $100 million into Swedish buy-now-pay-later app Klarna as part of the vendor's $460 million capital raise.
Recent investment has also seen the July launch of the CommSec Pocket App, aimed at small investors who can buy a package of shares for as little as $50 with low broker fees, and the introduction of BizExpress, which delivers faster business loans with same day lending decisions for unsecured loans up to $250,000 and secured loans up to $1 million.