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A new feature in the Commonwealth Bank’s app is the result of a collaboration with researchers at Harvard University that investigated consumer habits around home loan repayments.
Working with Harvard University’s Sustainability, Transparency, and Accountability Research (STAR) Lab, the bank’s behavioural science and financial wellbeing teams have looked to better align home owners’ mortgage due dates with their salary payments to alleviate financial pressure.
The research sought to understand the relationship between the date and frequency of a person’s salary payments relative to big-ticket spending and whether a change in timing of these elements could have positive effects on consumers’ sense of financial security.
They found that in 2021, around 15 per cent of CBA customers that received a regular salary were paid monthly, while 70 per cent were paid fortnightly and 15 per cent were paid weekly.
CBA’s executive general manager for home buying, Dr Michael Baumann, confirmed that research had revealed even small alterations like having the ability to shift your mortgage repayment date or the frequency of payments could make it substantially easier for consumers to manage their finances.
“The new feature in the CommBank app is designed to give customers control to be able to align their home loan repayments to when and how often they are paid,” he explained.
John Beshears, a professor at Harvard Business School and a member of the STAR Lab, added that the research sought to pinpoint the many moving parts of an average consumer’s financial life.
“Income arrives on one schedule, and each major recurring expense, such as a home loan payment, often arrives on its own separate schedule. When these schedules are out of sync, many customers have difficulty planning their spending,” he said.
They chose to develop an app integration to streamline the process of making mortgage payment adjustments.
“The digital self-serve feature provides customers with another option to filling out a form or having to speak to their CommBank lender or broker,” Dr Bauman said.
He added that they’re increasingly finding customers are seeking out ways to complete their banking tasks digitally.
ABOUT THE AUTHOR
Juliet Helmke
Based in Sydney, Juliet Helmke has a broad range of reporting and editorial experience across the areas of business, technology, entertainment and the arts. She was formerly Senior Editor at The New York Observer.
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