Commonwealth Bank: Fintech & Data Analytics in Banking Sector

This report delves into the applications of Fintech and data analytics within the banking sector, focusing on their impact and future implications. It begins with an introduction to Fintech and its role in enhancing financial services, alongside the use of data analytics for improved decision-making and risk management. The main body of the report describes various applications of Fintech and data analytics in banking, evaluating their effect on Australian banks over the next five years, considering aspects such as increased competition and the evolution of customer expectations. The report also recommends three specific actions for the Commonwealth Bank to remain competitive, including embracing innovation, updating technology, and preparing for economic changes. The conclusion summarizes the key findings and emphasizes the importance of these technologies for future growth and competitiveness within the banking industry.

Data Analytics in
Accounting, Economics &
Finance

Contents
1. INTRODUCTION.......................................................................................................................1
2. MAIN BODY...............................................................................................................................1
A) Describe the applications of Fintech and data analytics to the banking sector.........1
B) Evaluate the impact Fintech and data analytics will have on how banks in Australia
will operate over the next 5 years..........................................................................................2
C) Recommend three specific actions Commonwealth Bank can take over the next
12 months to ensure they remain competitive.....................................................................4
CONCLUSION...............................................................................................................................5
REFERENCES................................................................................................................................6

1. INTRODUCTION
Accountants use data analytics to support business entity uncover its important insights
within their financials, recognising procedure of improvements to improve efficiency and
manage in better way. Data analytics also focus on economics activities to presenting actual
economy past or present (Angrave and et.al, 2016). A collection of data in tabular format consist
of various activities in which consist of measurement, examination and publication of data. This
report develops for the directors of Commonwealth Bank of Australia to present application of
Fintech and data analytics to the banking sector. Along with analysis the impact of Fintech and
data analytics on Australian banks over the next 5 years. At the end of the report suggested
particular actions to Commonwealth Bank to become competitive.
2. MAIN BODY
A) Describe the applications of Fintech and data analytics to the banking sector
A Financial technology (Fintech) is utilised to defined how new tech that movement to
improve and alter the delivery and use of financial services. The financial technology mainly
utilised to support business, owners ans consumer for better manage financial activity. Fintech
is a vessel of financial technology that can be defined as rising financial service sector of the
21st century. The term mainly applied to technology related with the back end of set up
consumer and trade financial institutions. Fintech use by the Banks for back end procedure and
for behind the scenes observation of account activity like consumer facing solutions and use by
consumer for checking balance. There are defined different application of Fintech in Banks such
as:
 In the banking and financial sector use Fintech and offer services in regard of products,
business processes and business models. It entered into organisation to provide
services of lending and borrowing money online to both individuals and businesses.
 Some of the most outstanding applications of Fintech are mobile payments, machine-
controlled invested app, online lending, cryptocurrency.
 Financial technology may impact on Australian banks in competitive dynamics and
impact on their credit quality (Bergh and et.al, 2016).
 The application of Fintech is broad but within Australian believe that there are three key
drivers that supports will help to provide shape the future of banking in Australia.
Data analytics in banking sector
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Data analytics in banking plays important role in effective decision making to drive
organizations forward, enhance efficiency, increase returns and in turn accomplish business
objectives. Data analytics is a procedure of exploit, interpretation and conveyancing meaningful
insights from the data supports in decision making procedure. In Banking sector, data analytics
can enhance the extrapolative power of risk models utilised by banks as well as institutions. Big
data also utilised for credit management to find out fraud signalling and determined in real time
by using Artificial intelligence. With this method banking sector extract actionable intelligent
insights and quantitative assumptions. Banks can collect all insight information and covers all
kind of customer behaviour, account opening and closing, channel transactions, fraud and
customer departure (Brayne, 2017).
B) Evaluate the impact Fintech and data analytics will have on how banks in Australia
will operate over the next 5 years
Fintech are mainly rising at a regional instead of global level as similar to traditional retail
banking. It is arming the banking industry with tools that makes it more effective than ever
before. Different types of banking institutions are using the tool to increase their clients, mobile
apps to provide customer real time looks into their bank accounts and helps in secure against
fraud. In the baking industry it impacts in large manner and change the policy of financial
activities. Along with it is changing the way of financial services operates, customer
expectations and enormous effect on the sales of bank. The financial technology in Australian
banks experienced rapidly growth in recent times. Due to increase banks in economy so
financial technology impact on economy in direct manner and also features a diverse range of
start-ups entering many Fintech sub sectors worldwide the country (Lawrence, Minutti-Meza
and Vyas, 2018).
The number of new investments tackle the start-ups banks in Australia was at the
highest level. In the year 2020, Judo bank was the highest Australian start up with funding
valued at 1.5 billion U.S. Dollars. The bank mainly concentrates on small as well as medium
size entity and it is effective outstanding challenger banks entering the Australian banking
sector.
Currently present bill of consumer data right by the Australian Parliament has pass on
open banking and open data sub sectors of the Australian fintech landscape.
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Data analytics supports to bank in analysing and understanding the performance over
next 5 years. It impacts on banking industry in positive manner due to analysis large amounts of
customer data and develop personalized products and services in particular to individual
consumers. The Australian government apply many modifications to the consumer data right
treasury laws. It gives consumers the right to access data collection in regard of particular
institutions to send data to trusted third parties of their choice (McKinney Yoos and Snead,
2017).
Data analytics provides he senior management with effective inputs at every level in the
client life cycle. It should be portion of each major initiative in areas ranging from customers as
well as supply chain. It impacts in positively in banking industry that helps to banks to operate
next 5 years in increasing manner such as:
 Enhance the ability to address and analysis regulatory compliance.
 Analysis customer and product profitability
 Arrange fraud effectively.
 Set up a risk modification view as per the performance
 Supports senior management to make informed operational decisions
 Recognise high potential prospects and customers
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Australian banks used method of funding to promote a series of regtech activities in
which proper utilisation of data analytics to analysis the performance of bank and collect all the
financial data in effective manner.
C) Recommend three specific actions Commonwealth Bank can take over the next 12
months to ensure they remain competitive
In banking industry, Common wealth bank provides a variety of financial services in
which consist of retail, institutional banking, superannuation, funds management, investment
and broking services. To stay competitive in banking industry, require to take specific action that
are suggested below to Common wealth bank such as:
 Unlocking everyday innovation: It is a good action that take by the Commonwealth
Bank to become competitive over next 12 months. In banking industry enter new
competitors who provides interest at high rate so it will directly impact on existing bank.
For this it is required that apply new innovation that attract customers to arrive in bank
and take benefit of innovations (Nicholls, 2018). In past year Commonwealth Bank apply
innovation for management capabilities and entrepreneurial behaviours that drive
innovation and come together at global level. The innovation helps to increased number
of customers and and take unique approaches to meeting changing customer
requirements. It also helps in increase efficiency and performance of business and apply
innovation contribution in greater activity and national economic growth.
 Update and upgrade technology: In banking industry requires to use up to date
technology that provides various facilities to customers. When customer satisfy with the
bank services so they continue their account for longer period of time. Thus, it will help
to stay competitive for longer period of time. With the updated technology provide facility
on time and deliver important documents on time. It will help to fulfil the requirement on
time (Wedel and Kannan, 2016).
 Be prepared: In the baking industry always prepare for economy changes because it
impacts in large manner. For this require to prepare effective strategy that helps in
economic downturn and take right action for the clients. Therefore, it helps to connect
with customers for longer time period and become competitive in banking industry. At
the time of economic downturn provide effective offers to customers and ready to invest
their amount in bank savings like highest interest rate, locker facility and many others
(Sadaf and et.al, 2018).
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CONCLUSION
As per the above report it has been concluded that Banking industry is broad industry
where different banks provide products and services to customers as per their requirement. The
financial technology uses by banking industry to improve financial services in positive manner.
The main purpose of the fintech to improve innovation in banking industry and get growth for
longer period of time. Along with Data analytics use to calculate data in big manner to enhance
cross sales and manage data of customers in secure manner. Moreover, Commonwealth Bank
apply different actions for the stay competitive in market.
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REFERENCES
Books and Journals
Angrave, D. and et.al, 2016. HR and analytics: why HR is set to fail the big data
challenge. Human Resource Management Journal. 26(1). pp.1-11.
Bergh, D. D. and et.al, 2016. Using meta‐analytic structural equation modeling to advance
strategic management research: Guidelines and an empirical illustration via the strategic
leadership‐performance relationship. Strategic Management Journal. 37(3). pp.477-497.
Brayne, S., 2017. Big data surveillance: The case of policing. American sociological review.
82(5). pp.977-1008.
Lawrence, A., Minutti-Meza, M. and Vyas, D., 2018. Is operational control risk informative of
financial reporting deficiencies?. Auditing: A Journal of Practice & Theory. 37(1).
pp.139-165.
McKinney Jr, E., Yoos II, C. J. and Snead, K., 2017. The need for ‘skeptical’accountants in the
era of Big Data. Journal of Accounting Education. 38. pp.63-80.
Nicholls, A., 2018. A general theory of social impact accounting: Materiality, uncertainty and
empowerment. Journal of Social Entrepreneurship, 9(2), pp.132-153.
Sadaf, R. and et.al, 2018. An investigation of the influence of the worldwide governance and
competitiveness on accounting fraud cases: A cross-country perspective. Sustainability.
10(3). p.588.
Wedel, M. and Kannan, P. K., 2016. Marketing analytics for data-rich environments. Journal of
Marketing. 80(6). pp.97-121.
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