Commonwealth Bank of Australia Capstone

This study paper analyzes the financial condition and strategies of the Commonwealth Bank of Australia. Provides recommendations for improvement and valuable information on business management.

Commonwealth Bank of Australia Capstone 1
Commonwealth Bank of Australia Capstone
Student’s Name
Code + Course Name
Professor’s Name
University Name
City, State
Date

Common Wealth Bank of Australia Capstone 2
Executive Summary
The Common Wealth Bank of Australia is the leading bank in Australia and one of the
largest globally. The bank has been in business for more than a century and has maintained its
edge over the competition for an extended period of time. This study paper intends to mention
and analyze the financial condition of the bank and if it needs improvement or not. The research
will also evaluate the strategies employed by the Commonwealth Bank of Australia and find out
how effective their strategies have been and the sections that require changes. This study paper
will provide recommendations at the tail end of the paper. The research is important as it
provides the reader with an in depth analysis of the Commonwealth Bank of Australia and its
strategies. The paper also provides the reader with valuable information on the smooth
management and running of a business.

Common Wealth Bank of Australia Capstone 3
Table of Contents
Introduction......................................................................................................................................4
Problem Statement...........................................................................................................................4
SWOT Analysis...............................................................................................................................5
Strength........................................................................................................................................5
Weakness.....................................................................................................................................6
Opportunity..................................................................................................................................7
Threat...........................................................................................................................................8
Ethics, Values and Social Responsibilities......................................................................................9
Corporate Communication and Public Relations..........................................................................11
Recommendations..........................................................................................................................12
Future Study and Career................................................................................................................14
References......................................................................................................................................16

Common Wealth Bank of Australia Capstone 4
Introduction
The banking and financial services industry is one of the most profitable sectors of any
economy globally. The banking industry is however highly competitive and any bank intending
to grow and achieve its goals and objectives has to come up with effective strategies and follow
through on their implementation (Cornish, 2016, P.5). The Commonwealth Bank of Australia is
one of the largest banks in Australia and the neighboring region. The bank was formed in 1911
by the Australian government under the common wealth act. Since the year 1920 up to 1960 the
bank acted as Australia’s central bank. However after 1991 the bank was listed on the Australian
Stock exchange and five years later the bank was fully privatized (McIlroy, 2017, P.12). The
bank in 2018 became the third largest company listed in the entire Australian Stock exchange.
The bank has over 1,267 branches and 4,253 ATMs spread across 15 countries with a majority of
them in Australia. The bank is also a major employer with approximately 49,125 employees in
15 countries and 40,508 of these employees are based in Australia (Authority, 2018, P.13).
Problem Statement
In the contemporary world of technology and globalization banks have become highly
competitive and each bank has to find an edge over the competition if they are to survive. The
Commonwealth Bank of Australia has maintained its market share over the extended period of
time it has been functioning. The bank has also managed to keep a reputable brand name which
in turn attracts more potential customers and clients (Willcocks & Reynolds, 2015, P.9). This
paper intends to analyze the current business situation of the Commonwealth Bank of Australia
in relation to the business environment using the SWOT analysis tool. The analysis tool will
provide the reader with information on the bank’s strength, weakness, opportunity and threats.

Common Wealth Bank of Australia Capstone 5
The paper also intends to delve into the financial habits and strategies the Commonwealth Bank
of Australia has put in place. After an analysis the paper will provide recommendations on how
the largest private bank in the Australia can improve and become more effective (Gregory,
2016).
SWOT Analysis
The SWOT analysis is a business analysis tool that used to analyze the strength,
weakness, opportunities and threats that a company faces. The tool is effective when trying to
analyze if a company is making the correct decisions and also in the creation of strategies that
will be used to achieve the company’s goals and objectives (Gürel & Tat, 2017, P.7). A SWOT
analysis on the bank will provide a better understanding of the Commonwealth Bank of Australia
as well as the sectors it is performing excellent and sections that need improvement upon. Also
SWOT analysis is used to analyze strength, weakness, opportunity and threats. The tool is mostly
used as a competitive analysis in the market to compete with others. The company which uses
this tool compete competitively in the market.
Strength
According to the SWOT analysis the strength section covers the areas in which the
business in review has performed well and can leverage their strong points to their advantage
(Phadermrod, Crowder & Wills, 2019, P. 12). According to Main Financial Institution (MFI)
which is a ranking organization that deals with financial institutions the Commonwealth Bank of
Australia is the country’s largest and top bank. This is a massive boost to the bank as its

Common Wealth Bank of Australia Capstone 6
reputation is only improved by the ranking; the top ranking is also very attractive with customers
as well as investors thus attracting more (Conti-Brown & Lastra, 2018, P.16).
The Commonwealth Bank of Australia since its inception and even more so in the
contemporary times has always invested and insisted on the integration of technology to their
services. The Bank’s technology integration has made work easier for employees; customers are
also able to access the bank’s services more conveniently such as over the internet (Cranston,
2018, P.11).
The Commonwealth Bank of Australia is advantaged by their massive financial muscle,
making Australian $25,907 million as operational income in the year 2018 (Furnham & Gunter,
2015, P. 14). The Australian bank can leverage this financial muscle to purchase new assets,
accommodate more employees and customers as well as engage in effective marketing
campaigns. Massive finances also mean that the company can expand into new markets and gain
a larger share of the market. In the contemporary world globalization is on the increase and more
and more banks and other businesses are targeting the global market and the Commonwealth
Bank of Australia should expect competition from other banks not already in direct competition
with them (Conti-Brown, & Lastra, 2018).
Weakness
In this section of the research paper the author will analyze the flaws the company in
review has suffered (Sarsby, 2016, P.13). In the year 2017 the Commonwealth Bank of Australia
was hit by a massive money laundering scandal and as a result the Australian Transaction
Reports and Analysis Center (Austrac) launched investigations into the bank. The investigations

Common Wealth Bank of Australia Capstone 7
revealed that Commonwealth Bank of Australia had engaged in over 53,000 breaches of anti-
money laundering and terrorism funding regulations. The report had damaging effects on the
reputable organization. The bank took measures such as denying the senior shareholders their
bonuses; however, this did not seem to do much damage control. The bank should do more to
recover from the damage to their brand reputation (Adams, Borsellino, & Young, 2017).
Another major weakness that affects the Commonwealth Bank of Australia is that the
bank only has branches as is operational in a small region; this is Australia, New Zealand and
now expansion into Asia (Zerfass, Verčič & Wiesenberg, 2016, P.23). Maintaining in one region
ensures the company understands its market but in order for the bank to grow and expand they
need to expand into other regions such as Europe and the United States of America. A downturn
in the Eastern Asia economies or markets could highly affect the Commonwealth Bank of
Australia; if the bank had branches in other regions the downturns of one region could have such
devastating effects (Kang, Burdon, and Mooney, 2019).
Opportunity
In the opportunity section of the SWOT analysis the author will review the prospects that
available for the Commonwealth Bank of Australia to exploit (Madsen, 2016, P.18). The
Commonwealth Bank of Australia is ideally located for an expansion into Asia and other
regions. The bank can leverage its large financial muscle to open new branches and conduct
marketing in new regions it intends to expand into. The Commonwealth Bank of Australia the
largest bank being traded in the Australian Stock Exchange; this reputation can also be used as
an advantage in expansion since other banks and customers want to be associated with blue chip
banks (Williams, 2016, P.34). An expansion will benefit the bank by increasing its global market

Common Wealth Bank of Australia Capstone 8
share; the move will also cushion Commonwealth Bank of Australia from any economic
downturns that can occur in the region they are already present in.
In the information age technology can provide a company with a major advantage over its
competition. The Commonwealth Bank of Australia was named the leading bank in terms of
mobile banking app usage by customers. This is an opportunity for the bank to invest more into
mobile banking and become the leader in the sector. It is predicted that in future more mobile
and internet banking penetration is expected to be seen (Tisdell, 2018, P.26).
Threat
The threat area of the SWOT analysis covers the challenges that may present themselves
to the company in review from achieving its goals and objectives. One of the major threats the
Commonwealth Bank of Australia faces is the government of Australia’s policy to progressively
stop the guaranteeing of banks which will reduce the certainty of the bank achieving its goals and
objectives (Kang, Burdon & Mooney, 2019, P.45). Another major threat to the maximal
performance of the Commonwealth Bank of Australia is the slowdown in the growth rate of
China. China is the second largest economy in the world and the large growth of the economy
has brought with it major growth for banks and companies hence Commonwealth Bank of
Australia intends to expand into the region.
Despite the Commonwealth Bank of Australia being the largest bank in Australia it faces
stiff competition from other banks. The main competition to the bank includes the National
Australian bank, Westpac bank and ANZ bank among others. In the United States of America,
the market is leaning towards isolationism; this means that the market is turning towards local

Common Wealth Bank of Australia Capstone 9
brands at the expense of foreign brands regardless of the quality of their products. If the trend of
isolationism is to reach other countries and regions, the Commonwealth Bank of Australia is at
risk of losing its market share in foreign regions it has invested in (Tisdell, 2018, P.19). Another
threat to the Commonwealth Bank of Australia is the development of new technology in the
industry by a competitor. If a competitor develops a new technology to make their product more
affordable and convenient to the market, the Commonwealth Bank of Australia can lose their
market share to the competition. Another threat to the regular running of the Commonwealth
Bank of Australia is an unstable global economy. Instability in the global market can make
shareholders lose confidence in investing and as a result the bank will have less capital to work
with. Since the Commonwealth Bank of Australia is distributed in different countries
fluctuations in currency exchange rates can lead to disruptions or loses to the bank.
Ethics, Values and Social Responsibilities
Most businesses today have utilized to great success an approach that is social based in
order to achieve a workable relationship with both their customers and employees. In order to
achieve the ideal working environment, businesses have allocated a major portion of their
finances to ensure that they are able to emulate good values and mirror the society in which they
operate in. This has contributed majorly in establishing a connection with the society by making
them feel as the business is part of their societies (Burgh-Woodman, Bressan & Torrisi, 2017,
P.31). This approach is mostly constituted with Ethics, values and social responsibilities. Ethics
is the ability of a business to identify injustice in a society and trying to fight them. Values are
the behavioral characteristics that are portrayed by businesses which are beneficial to society
(Grace & Cohen, 2015, P.29).

Common Wealth Bank of Australia Capstone 10
Social Responsibility is the approach taken by businesses to ensure that they give back to
the community in terms of social, economic and environmental development which ensures that
all parties involved benefit (Hugman & Carter, 2016, P.44). The Commonwealth Bank as any
other successful business has over the years been involved in this approach which has proven
mostly beneficial. Programs such as the Start Smart initiative has re enforced the bank’s
commitment to the betterment of their general society. This program is aimed at creating
awareness about financial matters to children by engagement and interactive workshops run by
experts in their schools. This initiative has proven to be very successful as it is one of the largest
face to face financial literacy programs while research conducted has revealed that it has a
positive effect on students who take part in it (Lerbinger, 2018, P.19). The Commonwealth bank
has also been involved in the technological advancements of their society as they were the first
banking institution to develop quantum computer technology that is highly considered to be the
future of computer technology. This has handed the society a head start in the development of
quantum technologies and applications easing the burden that may arise in the future (Gürel, &
Tat, 2017).
The Commonwealth bank has also implemented good business practices that have
mirrored the society, practices such as inclusivity and diversity are very important to the bank.
They have set up a council who work to create strategies which tackle issues of diversity and
inclusion, such as the three-year diversity and inclusion strategy which was formulated to
achieve unity, foster inclusion and leverage diversity (Doorley, and Garcia, 2015). This is a five
level plan that includes levels such as diversity in leadership and inclusive culture which plays a
major role in mirroring the diverse society while also ensuring that the workforce feel valued and
respected. The commonwealth bank also regularly participates in offering volunteer services and

Common Wealth Bank of Australia Capstone 11
contribution programs. This has enabled them to interact with the society on a personal level
when they meet at fundraisers or while volunteering. Programs such as its Staff community fund
is one of the longest employee contribution programs has offered close to 13.7million dollars in
grants to fund community-based programs (Stenmark, 2017, P.22). They also have an emergency
assistance package which helps the society in the event of a disaster.
Corporate Communication and Public Relations
Public relations and corporate communications is a very critical branch in business
(Gregory 2016, P.43). Successful businesses have invested heavily in maintaining a good
relationship with the public through communication which has in turn fostered customer loyalty
and trust in the business (Adams, Borsellino & Young, 2017, P.41). Public relations in business
involve the maintaining of an organization’s image by the public. A bad image is very
detrimental to a business while a good image is seed as a contributing factor of success to a
business. It is very important that a business maintains a good image in order to achieve its goals
(Theaker, 2016, P. 17).
The commonwealth bank has realized the importance of public relations and has
formulated strategies to ensure that they maintain a good relation with the public. Strategies such
as the setting up of communication guidelines between members of the bank and shareholders
have aided members of the market and shareholders to access information about the bank in a
timely and efficient manner (Argenti, 2015, P.22). These guidelines are also reviewed from time
to time to ensure that they comply with set out laws while also fulfilling their purposes (Doorley
& Garcia, 2015, p. 13). They also achieve the intended purpose of relaying information by
undertaking programs such as roadshows, media interviews and investors’ briefing which occur

Common Wealth Bank of Australia Capstone 12
on a full year and half year basis. In addition the bank has a website that is constantly updated
with new features and information (Cornish, 2016). They also set up a webcast feature which
equips shareholders and investors with knowledge about the bank’s performance. Shareholders
and other parties are also able to subscribe to an email alert system that notifies them of major
happenings in the bank’s activities (Furnham, and Gunter, 2015).
Recommendations
In this section of the study paper the author will make suggestions on ways the
Commonwealth Bank of Australia can improve in order to perform more optimally than they
currently are. The study paper recommends that the Commonwealth Bank of Australia should
invest into expanding its market into Europe, the United States of America and other regions. An
expansion will shield the bank from regional economic fluctuations (Burgh-Woodman, Bressan,
& Torrisi, 2017). The Commonwealth Bank of Australia has also suffered from a major setback
in the scandal that found the bank had committed over 53,000 breaches of anti-money laundering
and terrorism funding regulations (Willcocks, & Reynolds, 2015). The setback has reduced the
trust and loyalty of customers in the brand, the bank should invest more effort in a marketing
campaign that is aimed at building their image as a legitimate and trustworthy brand. The
Commonwealth Bank of Australia was named as the leading mobile banking financial provider
in Australia. This research recommends that the bank should keep investing in the sector as well
as internet banking as it is predicted to rise in use as technology advances further as time goes by
(Phadermrod, Crowder, & Wills, 2019).
Although the commonwealth bank’s public relations strategies are up to date and efficient
they are also lagging behind in new venues to relate with the public such as the social media

Common Wealth Bank of Australia Capstone 13
platform which they do not have a major presence, this has hindered much of their effort in
public relations as they have not exploited an opportunity created by a society that is more digital
and socially aware. The bank should increase its social media presence in a bid to reach more
customers and increase their brand exposure while also setting up systems that can be used to
maintain a relation to the public. The Common Wealth Bank of Australia is the leading bank in
Australia and one of the largest globally. The bank has been in business for more than a century
and has maintained its edge over the competition for an extended period of time. This study
paper intends to mention and analyze the financial condition of the bank and if it needs
improvement or not. The research will also evaluate the strategies employed by the
Commonwealth Bank of Australia and find out how effective their strategies have been and the
sections that require changes. This study paper will provide recommendations at the tail end of
the paper. The research is important as it provides the reader with an in depth analysis of the
Commonwealth Bank of Australia and its strategies. The paper also provides the reader with
valuable information on the smooth management and running of a business.Systems such as
feedback and complaints can be set up on a social media platform which is easier and has a
higher outreach to people (Theaker, 2016). The bank has made numerous steps to portray good
values and ethics and live up to their responsibilities they are still not performing to their highest
standards, there has been complaints that the banking institution does not focus enough
manpower to this branch (Stenmark, 2017). The bank should ensure that enough personnel are
allocated to this sector which will ensure that every project they embark on will at end prove
successful. It is also recommended that the institution involves the society while rolling out
programs that are of influence to the society, this will involve participation of various levels of
society in the decision making process while picking a program and also involve them in the

Common Wealth Bank of Australia Capstone 14
implementation of the picked program to ensure inclusivity (McIlroy, 2017). The bank should
also try connecting these two branches, public relations and social responsibility, because they
are dependent on each other and a successful campaign of one leads to the improvement of the
other.
Future Study and Career
The financial services sector is wide and covers many areas and topics hence this
research paper was not able to cover all the factors about the Commonwealth Bank of Australia.
There is thus a large room for further research into the topic. The Commonwealth Bank of
Australia was found to have committed over 53,000 breaches of anti-money laundering and
terrorism funding regulations despite being a reputable bank (Zerfass, Verčič, and Wiesenberg,
2016). The bank however did not seem to have been affected to the extent expected. This
observation should be investigated further in future studies in order to clearly identify the effects
of the breaches of anti-money laundering and terrorism funding regulations in detail. The
observation has also inspired me to always follow regulations that have been set up within my
career so as to avoid negative effects of breaching regulations. The research conducted shows
that banks that make use of information to make informed strategies and then follow through in
their implementation succeed and grow. This has inspired me to make sure that any decision and
strategy I make in my career should be backed up with credible information to ensure my career
reaches its maximum limits.
Conclusion

Common Wealth Bank of Australia Capstone 15
Despite the Commonwealth Bank of Australia being the largest bank in Australia it faces
stiff competition from other banks. The main competition to the bank includes the National
Australian bank, Westpac bank and ANZ bank among others. In the United States of America,
the market is leaning towards isolationism; this means that the market is turning towards local
brands at the expense of foreign brands regardless of the quality of their products. If the trend of
isolationism is to reach other countries and regions, the Commonwealth Bank of Australia is at
risk of losing its market share in foreign regions it has invested in (Tisdell, 2018, P.19). Another
threat to the Commonwealth Bank of Australia is the development of new technology in the
industry by a competitor. If a competitor develops a new technology to make their product more
affordable and convenient to the market, the Commonwealth Bank of Australia can lose their
market share to the competition. Another threat to the regular running of the Commonwealth
Bank of Australia is an unstable global economy. Instability in the global market can make
shareholders lose confidence in investing and as a result the bank will have less capital to work
with. Since the Commonwealth Bank of Australia is distributed in different countries
fluctuations in currency exchange rates can lead to disruptions or loses to the bank.

Common Wealth Bank of Australia Capstone 16
References
Adams, M. A., Borsellino, G., & Young, A. (2017). Regulating conduct of financial institutions
in Australia: is culture the new frontier of regulation?. Journal of International Banking Law and
Regulation, 32(3), 86-92.
Argenti, P.A., 2015. Corporate communication. McGraw-Hill Higher Education.
Authority, A. P. R. (2018). Prudential Inquiry into the Commonwealth Bank of Australia (CBA)
Final Report. Australian Prudential Regulation Authority, Sydney, April.
Burgh-Woodman, H., Bressan, A., & Torrisi, A. (2017). An Evaluation of the State of the CSR
Field in Australia: Perspectives from the Banking and Mining Sectors. In Comparative
Perspectives on Global Corporate Social Responsibility (pp. 138-164). IGI Global.
Conti-Brown, P., & Lastra, R. M. (Eds.). (2018). Research Handbook on Central Banking.
Edward Elgar Publishing.
Cornish, S. (2016). MONETARY TARGETING IN AUSTRALIA. Milton Friedman:
Contributions to Economics and Public Policy, 334.
Cranston, R. (2018). Principles of banking law. Oxford University Press.
Doorley, J. and Garcia, H.F., 2015. Reputation management: The key to successful public
relations and corporate communication. Routledge.
Furnham, A. and Gunter, B., 2015. Corporate Assessment (Routledge Revivals): Auditing a
Company's Personality. Routledge.

Common Wealth Bank of Australia Capstone 17
Gregory, A., 2016. Public relations and management. In The public relations handbook (pp. 76-
100). Routledge.
Gürel, E., & Tat, M. (2017). SWOT ANALYSIS: A THEORETICAL REVIEW. Journal of
International Social Research, 10(51).
Hugman, R. and Carter, J. eds., 2016. Rethinking values and ethics in social work. Macmillan
International Higher Education.
Kang, K., Burdon, S. and Mooney, G., 2019. Innovation Cultural Factors in Australian Business
Environment: IT Organizations in Australia. In Handbook of Research on Contemporary
Approaches in Management and Organizational Strategy (pp. 129-145). IGI Global.
Lerbinger, O., 2018. Corporate Communication: An International and Management Perspective.
Wiley-Blackwell.
Madsen, D. Ø. (2016). SWOT Analysis: A Management Fashion Perspective. International
Journal of Business Research, 16(1), 39-56.
McIlroy, J. (2017). Re-nationalise the commonwealth bank. Green Left Weekly, (1149), 11.
Pearson, R., 2017. Business ethics as communication ethics: Public relations practice and the
idea of dialogue. In Public relations theory (pp. 111-131). Routledge.
Phadermrod, B., Crowder, R. M., & Wills, G. B. (2019). Importance-performance analysis based
SWOT analysis. International Journal of Information Management, 44, 194-203.
Stenmark, M., 2017. Environmental ethics and policy-making. Routledge.

Common Wealth Bank of Australia Capstone 18
Theaker, A. (2016). The public relations handbook. Routledge.
Tisdell, C. (2018). The uptake of internet banking in Australia and changes in banking
services. Changes, 12, 4.
Willcocks, L., & Reynolds, P. (2015). The Commonwealth Bank of Australia–strategizing from
outsourcing to the cloud part 1: perennial challenges amidst turbulent technology. Journal of
Information Technology Teaching Cases, 4(2), 86-98.
Williams, B. (2016). The impact of non-interest income on bank risk in Australia. Journal of
Banking & Finance, 73, 16-37.
Zerfass, A., Verčič, D. and Wiesenberg, M., 2016. Managing CEO communication and
positioning: A cross-national study among corporate communication leaders. Journal of
communication management, 20(1), pp.37-55.