A new feature developed by the major bank's behavioural economics team prompts Australians to pay off credit card debt faster using their tax returns.
The feature dubbed 'digital nudges' lets customers know in real time when their tax return hits their account, and provides targeted messages encouraging how to best use their return to improve financial wellbeing.
The technology behind this feature is CommBank's Customer Engagement Engine, which uses a combination of machine learning and insights from customer activity to offer targeted notifications to eligible customers.
First trials of the new feature occurred last year with more than one million customers sent digital prompts in the CommBank app to encourage them to consider making a credit card repayment.
Results courtesy of CommBank's Financial Wellbeing and Behavioural Economics teams found 'digital nudges’ helped deliver a shift in customer behaviour.
- Customers who engaged with the credit card repayment 'nudge' repaid an average of $541 more in the month following their tax refund.
Commonwealth Bank's Chief Data & Analytics Officer, Dr Andrew McMullan, said this trial would result in more than $4 million in 'catch-up' credit card repayments each year if the nudge feature was rolled out to all eligible customers.
"When you consider the average tax refund is approximately $2,400, tax time provides an ideal opportunity for many Australians to accelerate their financial goals including managing debts and saving for a rainy day," Dr McMullan said.
"The results highlight contacting customers in a targeted manner and at the right time, can help them to follow through on their intentions and make meaningful progress towards their goals."
Image by CardMapr via Unsplash