“With this simplicity, it is very easy to create. It will not suit all borrowers, but those who are more confident, and particularly in this refinance market which we believe will be important in the future.
The new digital home loan comes as AMP also announced a digital mortgage on Wednesday, which it will offer in partnership with fintech Nano, and National Australia Bank rebranded ubank after onboarding 86,400. AMP and ubank will also seek to enter the digital mortgage market, in which Tic:Toc, part of Bendigo Bank, and Athena Home Loans have also increased their volumes.
The ABC said its digital loan would not be available through mortgage brokers and would not have an interest-only offer. This will be for simple loans, with borrowers on PAYG salaries and a relatively low loan-to-value ratio – initially borrowers will require a 20% deposit for loans up to $3 million. There will be no honeymoon rates or fees attached to the product.
Unloan was created using the CBA x15 “xStack” platform, which allows “application programming interfaces” to connect to other parts of the bank to meet regulatory requirements.
The launch of Unloan poses a challenge for rival banks, including ANZ, which has yet to add digital home lending to its new ANZ Plus platform; and to NAB, which talked during its recent interim results about a new digital mortgage platform to reduce approval times, but it’s not being shown to customers directly through digital channels.
On a strategic day focused on various technology initiatives, CBA also announced a range of new features in its app, which it says is the eighth most used app in Australia with 9.4 million average daily logins.
Mr Comyn said the CBA wanted to use this reach as a new source of comparative advantage for the bank to maintain cheap funding through deposits.
New features include CommBank Yello, a new loyalty feature that will offer cashback and rebates to customers. It may offer customers personalized purchase offers, including discounts on telecommunications services with other banking partners. Purchase offers will be tailored to recent home loan customers.
The ABC also said its popular stock trading app, CommSec, will be integrated with the CommBank app through CommSec Pocket. He expects this to increase equity market participation. The CommSec app will continue to exist, but will be geared more towards sophisticated investors.
The ABC also updated its Dollarmites program for the digital age, launching Kit, a money app and digital information tool for kids.
The Kit card will allow children to manage their own income, savings and expenses and provide learning. NAB offers a similar offering through an agreement with Spriggy.