Commonwealth Bank has taken retail transaction banking further in the direction of personal financial management, with the launch of the latest version of its mobile banking app, while upgraded Raiz Invest and CommSec investment apps are focusing on rewards and micro-investing.
CommBank app 4.0 includes a full suite of budgeting and goal-setting tools, a wider range of alerts and prompts, and payment management tools.
Raiz has introduced a featre called Raiz Rewards, which gives a percentage of cash back to its users when they shop online through its partner brands.
CommSec has launched Pocket app, which facilitates very low minimum investments.
Commonwealth Bank will use the Commbank app to “guide” customers to the appropriate product, such as a low-rate credit card for customers with a revolving balance.
One tool allows customers to “explore rebates”, such as rebates on government charges and utility bills.
Upgraded security settings include customer-driven payment limits and location-based security, which allows the customer to block transactions outside a designated area.
The bank worked with a team at Harvard University to “gamify” the tools and make them more visual.
“This is a move away from transaction banking to smart banking,” said CBA group executive of retail banking services Angus Sullivan.
CBA has seven million digital banking customers – 5.6 million of them using the app. More than 2.5 million customers have used the digital wallet for Apple Pay, Android Pay or Google Pay.
CBA chief analytics officer Andrew McMullan said the net promoter score for customers who get alerts through the app is much higher than for those who don’t.
McMullan said his team was using machine learning capability to refine its messaging to customers and be more responsive to the message that customers do and don’t want.
The Raiz rewards program has 200 retailers, with the likes of Woolworths, The Iconic and Apple. The cashback will automatically be reinvested into the user’s investment portfolio.
Raiz chief executive George Lucas says: “What all these extra services and features mean is that Raiz is becoming a more integrated financial service solution, not only by allowing you to build savings and oversee your investment portfolio, but to track your expenditure through My Finances. Eventually it’s our goal to offer a debit-like card for spending.”
CommSec is targeting the same space as Raiz with the launch of its new Pocket app, which breaks down the barriers to investing with its minimum investment starting at $50 (compared to the usual $500 for listed securities) into a range of ETFs.
According to CommSec, just 4 per cent of Australian adults trade online in the sharemarket and the app aims to increase this by offering ETF options that cover local and global industries and regions.
Like Raiz, Commsec Pocket app offers automated regular investing in time with users’ savings or salary cycle.
Executive general manager of CommSec Richard Burns says: “As Australia’s largest digital broker, we know that many people find investing in shares out of their reach or too complex. We’ve broken down those barriers by significantly reducing the amount needed to get started, reducing the cost of investing as well as simplifying choice.”
Unlike Raiz, Commsec Pocket users can choose from seven ETF themes. They include an “Aussie Top 200”, an emerging markets ETF, a global healthcare companies ETF, global 100, sustainability leaders, “Aussie dividends” that pay above-average returns and a “tech savvy” which includes the top 100 tech and non-financial NASDAQ companies.
Commsec Pocket will be offered at $2 brokerage for trades up to $1000 and 20 basis points for trades above $1000. Investors pay only when they trade with zero ongoing account keeping fees.
This compares with the usual brokerage fees of around $10 to $25, which are offered by most trading platforms.
Burns says: “CommSec Pocket is our latest innovation that will help empower more Australians to grow their wealth. We will continue to listen to our customers and find new ways to help all Australians access the opportunities the sharemarket can bring.”
According to Raiz, it has received many requests for a debit card and an investment portfolio offering Bitcoin. The process to for the debit card has begun.
Lucas says: “Hopefully, neither will prove insurmountable, and you can be assured we are actively investigating how it might be possible to deliver both features.”
Raiz’s Conservative portfolio achieved outperformance with the one-year return at 6.9 per cent compared with the Chant West benchmark at 5.6 per cent for the same period.
The Moderately Aggressive portfolio earned 8.7 per cent and the Emerald portfolio earned 10.9 per cent, outperforming the Chant West benchmark of 7 per cent.
The Commsec Pocket ETFs include: iShares Core S&P/ASX 200 ETF; iShares Global 100 ETF; iShares MSCI Emerging Markets ETF; SPDR MSCI Australia Select High Dividend Yield Fund; BetaShares NASDAQ 100 ETF; BetaShares Global Sustainability Leaders ETF; iShares Global Healthcare ETF.