Innovation and Research for Enhanced Customer Relationships

This presentation discusses how Commonwealth Bank of Australia used innovation and research to enhance customer relationships and ensure its sustainability. It explores the strategies and approaches implemented by the bank to regain customer trust and improve customer engagement. The presentation also highlights the role of high-tech labs, credit card business, segmentation and targeting, and the behavioral economics team in achieving these goals.

MINTO PYRAMID
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INTRODUCTION
•THE BANKING LANDSCAPE IN AUSTRALIA CONSISTED OF FOUR BIG
BANKS, ONE OF THEM BEING COMMONWEALTH BANK OF
AUSTRALIA.
•INCREASED POWER OF THESE BANKS URGED THE LAW TO INTERVENE
AND IMPOSE RESTRICTIONS ON THEIR BUSINESSES.
•THAT DID NOT STOP THEM FROM GROWING RELENTLESSLY IN TERMS
OF BUSINESS AND REVENUE GENERATION.
•THE MAIN FORM OF REVENUE GENERATION FOR THE BANK, WAS THE
CREDIT CARD BUSINESS.

COMPLICATION
•SCANDALS AND CUSTOMER BETRAYALS HOWEVER, BECAME
EMINENT WITH THESE BANKS.
•THERE WAS A STRUGGLE TO REGAIN CUSTOMER TRUST. IT IS IN THIS
CONTEXT THAT THE COMMONWEALTH BANK, WHICH WAS ALREADY
INNOVATIVE IN ITS APPROACHES, BEGAN TO IMPLEMENT
INNOVATIVE STRATEGIES TO ENHANCE CUSTOMER RELATIONSHIPS.

HOW DID THE CBA GET OUT OF SUCH A COMPLICATION, TO
BUILD LONG TERM CUSTOMER RELATIONSHIPS, AND
DEVELOP ITSELF SUSTAINABILITY?
QUESTION

THE MAIN ARGUMENT: INNOVATION AND RESEARCH AIDED IN ENHANCED
CUSTOMER RELATIONSHIPS, AND HENCE, THE SUSTAINABILITY OF THE
COMMONWEALTH BANK

HIGH TECH LABS
•HIGHLY INFRASTRUCTURED LABS, RESEMBLING A TECH FIRM
•CBA SOUGHT TO DEVLOP NEW IDEAS CONSISTENT WITH ITS VISION
•TESTING GAVE THE BANK A COMPETITIVE ADVANTAGE.

CARD BUSINESS
•PERFORMANCE OF CARD HOLDERS ON CUSTOMER ENGAGEMENT
AND OTHER USAGE METRICS.
•AN INTEGRATED SUITE OF CREDIT CARD FEATURES, DESIGNED TO
IMPROVE CUSTOMER EXPERIENCE, BENEFITTING IMMENSELY
•FREE TRAVEL INSURANCE TO SOME CUSTOMERS BASED ON MARKET
RESEARCH.

SEGMENTATION AND TARGETING
•PROMOTING CUSTOMER COMPATIBILITY.
•SEGMENTED FAMILIES INTO AWARD, LOW RATE AND LOW FEE,
BASED ON USAGE PATTERNS.
•INCREASED CUSTOMER ENGAGEMENT IN THE PROCESS THROUGH
FINANCIAL CONSULTATIONS, IMPROVING CUSTOMER
RELATIONSHIPS.

THE BEHAVIORAL ECONOMICS TEAM
•INCORPORATED PSYCHOLOGICAL INSIGHTS INTO STANDARD
ECONOMICS.
•DEVISING INTERVENTIONS TO HELP PEOPLE MAKE BETTER
DECISIONS.
•SET UP A SCORING SYSTEM TO ENSURE THAT DECISIONS WERE TRUE
TO THE ORGANIZATIONAL PURPOSE AND TRANSPARENT TO
STAKEHOLDERS

THE GOOD AND BAD EXPERIMENT
•AIMED AT INFORMING CUSTOMERS ABOUT THE BAD SIDES OF
CREDIT CARDS, THERBEY GAINING CONSUMER TRUST.
•DEVELOPED SIX STAGES OF CREDIT CARD JOURNEY, AND DID AN
EXTENSIVE RESEARCH TO EVALUATE THE EFFECTIVENESS
•THE TRANSPERANCY APPROACH BENEFITED IMMENSELY IN
BUILDING CUSTOMER TRUST AND RELATIONSHIP.

CONCLUSION
•THE MAIN STRATEGY OF THE BANK WAS TO INNOVATE IN A WAY
WHICH WOULD HELP IN BUILDING CUSTOMER ENGAGEMENT AND
TRUST TOUCHPOINTS. THIS LONG TERM ORIENTATION WITH THE
CUSTOMERS WOULD HELP THE BANK IN SUSTAINING ITS GROWTH
AND DEVELOPMENT.

THE MINTO PYRAMID OF THE CASE
INNOVATION AND RESEARCH AIDED IN ENHANCED CUSTOMER RELATIONSHIPS, AND HENCE, THE SUSTAINABILITY OF THE
COMMONWEALTH BANK
HAS HIGH TECH INNOVATION LABS
IN SYDNEY AND LONDON
HIGHLY
INFRASTR
UCTURED
LABS,
RESEMBLI
NG A
TECH
FIRM
CBA
SOUGHT
TO DEVLOP
NEW
IDEAS
CONSISTEN
T WITH ITS
VISION
REAL
TIME
USABILIT
Y
TESTING
GAVE THE
BANK A
COMPETI
TIVE
ADVANTA
GE.
CREDIT CARD BUSINESS
ASSESSED
PERFORM
ANCE OF
CARD
HOLDERS
ON
CUSTOMER
ENGAGEM
ENT AND
OTHER
USAGE
METRICS.
DEVELOPE
D AN
INTEGRATE
D SUITE OF
CREDIT
CARD
FEATURES,
DESIGNED
TO
IMPROVE
CUSTOMER
EXPERIENC
E,
BENEFITTI
NG
IMMENSEL
Y
PROVIDE
D FREE
TRAVEL
INSURAN
CE TO
SOME
CUSTOME
RS BASED
ON
MARKET
RESEARC
H.
SEGMENTATION AND TARGETING
PROMOTI
NG
CUSTOME
R
COMPATI
BILITY.
SEGMENT
ED
FAMILIES
INTO
AWARD,
LOW
RATE
AND LOW
FEE,
BASED
ON
USAGE
PATTERN
S
INCREASED
CUSTOMER
ENGAGEME
NT IN THE
PROCESS
THROUGH
FINANCIAL
CONSULTATI
ONS,
IMPROVING
CUSTOMER
RELATIONSHI
PS.
THE BEHAVIORAL ECONOMICS TEAM
INCORPO
RATED
PSYCHOL
OGICAL
INSIGHTS
INTO
STANDAR
D
ECONOMI
CS.
DEVISING
INTERVE
NTIONS
TO HELP
PEOPLE
MAKE
BETTER
DECISION
S.
SET UP A
SCORING
SYSTEM TO
ENSURE
THAT
DECISIONS
WERE
TRUE TO
THE
ORGANIZA
TIONAL
PURPOSE
AND
TRANSPAR
ENT TO
STAKEHOL
DERS
THE GOOD AND BAD EXPERIMENT.
AIMED AT
INFORMI
NG
CUSTOME
RS
ABOUT
THE BAD
SIDES OF
CREDIT
CARDS,
THERBEY
GAINING
CONSUM
ER TRUST.
DEVELOP
ED SIX
STAGES
OF
CREDIT
CARD
JOURNEY,
AND DID
AN
EXTENSIV
E
RESEARC
H TO
EVALUAT
E THE
EFFECTIV
ENESS
THE
TRANSPE
RANCY
APPROAC
H
BENEFITE
D
IMMENSE
LY IN
BUILDING
CUSTOME
R TRUST
AND
RELATION
SHIP.

THANK YOU!