“Over the course of this year, we would like to see a really large number of customers approved through Unloan within 10 minutes,” said Angus Sullivan, CBA’s Retail Banking Group Director.
First price structure on the market
Chief executive Matt Comyn said the digital direct mortgage would appeal to customers “with a simpler set of needs” who had a “lower upfront cost, so we can pass on those pricing benefits.”
“We believe this is an innovative, first-to-market pricing structure,” he said on Wednesday.
“With this simplicity, it is very easy to create. It will not suit all borrowers, but those who are more confident, and particularly in this refinance market which we believe will be important in the future.
The new digital home loan comes as AMP also announced a digital mortgage on Wednesday, which it will offer in partnership with fintech Nano, and National Australia Bank rebranded ubank after onboarding 86,400. AMP and ubank will also seek to enter the digital mortgage market, in which Tic:Toc, which is financed by Bendigo Bank, and Athena Home Loans have also increased their volumes.
The ABC said its digital loan would not be available through mortgage brokers and would not have an interest-only offer. This will be for simple loans, with borrowers on PAYG salaries or who are self-employed, and a relatively low loan-to-value ratio (LVR) – initially borrowers will need a 20% deposit for loans up to to $3 million. There will be no honeymoon rates or fees attached to the product.
Unloan was created using the CBA x15 xStack platform which allows “application programming interfaces” to connect to other parts of the bank to meet regulatory requirements.
The launch of Unloan poses a challenge for rival banks, including ANZ, which has yet to add digital home lending to its new ANZ Plus platform; and to NAB, which spoke during its recent interim results of a new digital mortgage platform to reduce approval times, but this is not provided to customers directly through NAB digital channels but rather is a tool used by its bankers.
Loyalty, share exchange
On a strategic day focused on various technology initiatives, CBA also announced a range of new features in its app, which it says is the eighth most used app in Australia with 9.4 million average daily logins.
Mr Comyn said the CBA wants to use this reach as a new source of comparative advantage for the bank to maintain cheap funding through its strong deposit-taking capacity, which has always been driven by the larger network. of branches.
He said the CBA expects its market share to continue to be challenged by competitors, including from the tech industry, and wants to build proprietary digital assets to keep customers engaged. in its application over time.
“Banking, like many industries, is a game of scale,” he said during the briefing. “It’s all about the quality and number of customer relationships and a big part of our job is to broaden and deepen our customer relationships.”
New app features include CommBank Yello, a new loyalty feature that will offer cashback and rebates.
It will provide customers with personalized shopping offers, including discounts on telecommunications services. Purchase offers will also be tailored to recent home loan customers for things they might want to buy for the home.
The ABC also said its popular stock trading app, CommSec, will be integrated with the CommBank app through CommSec Pocket. The ABC said $1.23 billion had been invested through CommSec Pocket since its launch in 2019. It did not disclose the funds currently under management.
He expects Pocket’s integration into the core app to increase equity market participation, as it provides banking clients with thematic exchange-traded funds (EFTs). The CommSec app will continue to exist, but will be geared more towards sophisticated investors.
The ABC has also created a new program to educate children about money. Called Kit, it is a money app and digital information tool that will allow children to manage their savings, spend on a card, while learning about money. It will allow parents to manage the distribution of pocket money by defining tasks for children. NAB offers a similar offering through a deal with fintech startup Spriggy.
Kit’s creation, which also came from its x15 ventures unit, comes after the ABC came under pressure over its Dollarmites program, which provided financial education to children in schools. It says EY has audited the Kit framework to inform the activities kids can do in the Kit app, and the program has been reviewed by behavioral scientists.