The Commonwealth Bank is taking on Afterpay and warding off other competitive threats with its latest spending spree

Commonwealth Bank CEO Matt Comyn has laid out CBA’s digital strategy. (SMH, Louie Douvis)
  • Commonwealth Bank boss Matt Comyn has laid out the bank’s strategy behind a run of recent investments.
  • CBA has recently bought stakes in energy provider Amber and online shopping platform Little Birdie, has ramped up its startup incubator x15, and is changing its mobile experience.
  • Comyn put the big spending spree down to dealing with competitive threats before they managed to disrupt the bank, and confirmed it was going after Afterpay with its latest stake in Little Birdie.
  • Visit Business Insider Australia’s homepage for more stories.

After investing hundreds of millions of dollars in new products and other businesses, Australia’s biggest bank has finally articulated its unified theory of everything.

In recent months and days, CBA has made a seemingly endless string of announcements, from throwing serious money into a new online shopping platform and energy provider, to taking on the buy now, pay later sector and shaking up its online banking products.

Addressing media on Thursday, CBA boss Matt Comyn explained what the $176 billion institution is playing at, promising to deliver the future of banking to Australians first, ostensibly by delving into new markets, and fighting off a growing number of competitive upstarts.

“We certainly recognise customers are looking for value, and they want to be rewarded for a loyal relationship with CBA,” he said. “There’s multiple different ways that we can bring some of those experiences together… for our 10 million retail banking customers, and our 700,000 business customers.

“We’re bringing all of that together to really make sure that we continue to have technology very much at the centre of our strategy going forward, and how we reimagine products and services in a digital economy.”

CBA has announced it will be the first major bank to allow customers to see all of their accounts with rival institutions, as they integrate the new Consumer Data Right (CDR) regime. Doing so will mean Australians will be able to see their whole financial situation in one place, including superannuation balances.

Retail banking executive Angus Sullivan said the bank itself would use the extra data from third parties, such as wages, which would “help enormously” to quickly approve loans and determine customers’ other liabilities.

The bank is taking more and more interest in how it can collect and use customer data to both “bring greater value” to customers as well as increasingly keep them inside CBA’s ecosystem and monetise their engagement.

“We believe there’ll be a number of different competitive threats that will come to the industry over the long term, certainly,” Comyn said.

“We think some of the legislative changes around consumer data right creates both opportunities, and potentially threats, which is why from our perspective it’s very much about getting the, you know, the long term plans and the investment agenda lined up with what we think is going to deliver the best and most compelling banking proposition for our customers.”

On Thursday, CBA also revealed it had bought a 25% stake in Amber, a wholesale energy provider with a focus on renewables, for $20 million. With borrowers to be provided with an energy deal when they buy a home, it marks a major push by CBA to offer customers a range of services beyond banking.

It is doing the same on a retail front, hoping to directly target customers with Little Birdie, an Australian startup hoping to become the ‘homepage of online shopping’. Combined with its investment in buy now, pay later platform Klarna, which has struggled to find a significant foothold in Australia, and its own BNPL offering, it marks a growing push into ecommerce.

Comyn confirmed to Business Insider Australia that the Little Birdie investment was at least in part motivated by a desire to more closely compete with the likes of Afterpay. The biggest BNPL platform in the country, Afterpay has proved effective in closely engaging younger Australians, and tied its value to being a marketing platform and customer acquisition channel for retailers.

“With younger customers, we can see how much time customers are spending shopping for deals, and we think it’s a very innovative shopping experience that they’re bringing to market,” Comyn said.

“That’s one driver. [But] by bringing together our retail business customers, specifically through Little Birdie, I guess [we are] uniquely able to deliver a very high volume of low cost leads to our businesses.”

In other words, Little Birdie will let retailers sell directly to CBA’s enormous customer base for what Comyn says is “a quarter of the price” of other BNPL competitors.

“We are integrating new services into our platform to customise and personalise the digital experience in ways that will increase engagement and bring greater value to our customers,” he said.

But as CBA expands its vision well beyond banking, and begins to eat into other markets, it is shareholders who may fare best.