Commonwealth Bank of Australia: Marketing Strategy Analysis

Overview of Commonwealth Bank of Australia

Headquartered in Sydney, Australia, the Commonwealth Bank of Australia (CBA) is one of the country's four largest banks. Established in 1911 as a government institution, the bank has seen tremendous growth since its founding. Today, CBA operates as a multinational bank with a presence across the United States, the United Kingdom, Fiji, New Zealand, and Asia. The bank was privatized in 1996, following share issuances worth USD 1.2 billion in 1991, USD 1.7 billion in 1993, and USD 5 billion in 1996. As of January 2008, CBA was the second-largest Australian-listed company on the Australian Securities Exchange (Commbank.com.au, 2014).

Also known as CommBank, the institution provides a broad range of services including insurance, investments, retail banking, business banking, institutional banking, funds management, and broking services. The bank's structure is organized into three main divisions: Retail Banking, Premium Business Services, and Wealth Management (Commbank.com.au, 2014).

This division is dedicated to providing services to small business customers as well as individual personal banking clients.

The Premium Business Services division is further divided into two units: Institutional Banking and Markets (IB&M) and Business and Private Banking (B&PB). Institutional Banking and Markets serves large-scale projects, including institutional clients and clients from global markets. Business and Private Banking, by contrast, serves business and private customers who require specialized banking services.

This division of CBA manages funds and provides business-oriented services such as business reporting, insurance, and portfolio management.

Marketing Strategies at CBA

The subsidiaries of Commonwealth Bank are spread across several nations. These include CommInsure, Commonwealth Securities, Colonial First State, and Bankwest in Australia; ASB and Sovereign in New Zealand; Colonial National Bank in Fiji; PT Bank Commonwealth in Indonesia; and AMTD Group Company Limited in Hong Kong. This geographic diversification allows CBA to serve clients on a global scale.

A recent inquiry into the Australian banking system has indicated that Australia has a fully developed banking sector. To capture market share from competitors, the primary differentiator will therefore be the provision of superior services. Accordingly, Australian banks must introduce enhanced offerings to grow their market share. One of the most critical areas in this regard is e-banking, along with the delivery of services at a personalized level, and several Australian banks are already investing heavily in digital banking solutions.

To uphold its standards, Commonwealth Bank of Australia maintains a dedicated Marketing department. CBA is focused on changing the way banking is experienced — specifically, on making banking personal for its clients by engaging with them directly across all matters.

In pursuit of this goal, CBA has developed software applications that deliver banking services to its broad client base, making the experience more personal and convenient. Current digital offerings include online account balance confirmation, allowing clients to check their balance without needing to visit a branch or an Automated Teller Machine (ATM). Online accounts also enable clients to review transaction histories and maintain records of payments and receipts. These services allow clients to identify any unexpected changes in their financial statements, keeping information transparent between the bank and its customers. Additional services include funds transfers, online salary payments, and bill payments. This transparency strengthens client confidence, and because clients can access the information they need independently and on demand, it effectively enables personalized banking (Commbank.com.au, 2014).

Furthermore, CBA has launched its mobile application across all major platforms, including Windows Phone, Android, and Apple's iPhone. This allows clients to access account information on the go — checking account details, payment histories, and making transfers regardless of their location (Commbank.com.au, 2014).

Competitor Analysis

Another suggestion is that, while all banks are currently focused on releasing mobile phone applications, much of the business community prefers personal computers over smartphones. Introducing a desktop application that provides e-banking services could therefore add meaningful value to the bank's digital offering. Such an application would allow customers to access their accounts without repeatedly logging into a website, and would provide functionality equivalent to both the mobile application and the existing web portal, keeping the experience consistent across all platforms.

Additionally, CBA should consider developing other applications that can indirectly benefit its market share. For example, a game designed for children that teaches the value of saving could generate goodwill toward the bank and, over time, contribute to expanding its customer base.

As one of the four largest banks in Australia, CBA's primary competitors include National Australia Bank, the Australian and New Zealand Banking Group, and Westpac Banking Corporation.

National Australia Bank (NAB), established in 1893, is the fourth-largest bank in Australia by market capitalization. It ranks as the 17th-largest bank in the world and operates across 10 countries, serving more than 10.5 million customers. NAB manages more than 1,800 branches and over 4,500 ATMs globally (Nab.com.au, 2014).

NAB launched its major online services platform in 2009 under the brand name UBank. Key e-banking services include the ability to create accounts entirely online, a feature introduced in 2009 that earned Money Magazine's Award in the same year. NAB subsequently expanded its online account services with UHomeLoan, for which it received the award of Best Online Operator (Nab.com.au, 2014).

NAB has also launched a mobile application on Android and Apple's iPhone platforms, allowing customers to access account information without visiting a branch or using a personal computer. Other online services mirror those of CBA and include account balance information, funds transfers, transaction history, and bill payments.

The Australian and New Zealand Banking Group (ANZ) is the third-largest bank in Australia. The only institutions larger than ANZ are Commonwealth Bank and Westpac. Like CBA and NAB, ANZ operates globally and has a strong presence in thirty countries.

ANZ offers a broad range of online banking services, including a mobile application that provides account information, balance inquiries, transaction history, and payment transfers. One limitation is that the application is only available on Android. Customers can also use ANZ's online tools to locate nearby ATMs (Anz.com, 2014). Other online services are comparable to those offered by CBA and include account inquiries, balance checks, transaction history reviews, and fund transfers.

Westpac Banking Corporation (also known as Western Pacific Bank) is the second-largest bank in Australia. Headquartered in Sydney, Westpac manages more than 1,200 branches and 2,900 ATMs across Australia, making it the country's largest banking network.

Westpac has launched an application called Pay Pig, which helps parents understand and improve their children's saving habits. One limitation is that this application is only available on Apple's iPhone (Westpac.co.nz, 2014). Other services offered by Westpac are similar to those of CBA and include balance inquiries, transaction details, and the ability to transfer funds online.

Conclusion

The Australian banking industry has seen remarkable growth over the last few decades. Currently, the industry has fully matured, making the capture of new market share a significant challenge. New customers can only be attracted through the provision of better services. In this context, client solutions must be designed with personal relevance in mind. To achieve this, banks must build solutions that serve clients on the go, wherever they may be.