ABC partners with researchers at Harvard University to help customers better manage their home loans
Commonwealth Bank today announced the launch of a smart new feature in the CommBank app that allows customers to simply and easily align their home loan repayments with the date and frequency of their regular incoming salary payments. .
The launch follows a collaboration with Harvard University’s STAR Lab to explore how timing large expenses relative to income can improve a person’s cash flow and facilitate better financial results.
“There are so many moving parts in people’s financial lives,” said Harvard Business School professor and STAR Lab fellow John Beshears. “Income comes on a schedule, and every major recurring expense, like paying off a home loan, often comes on its own schedule. When these schedules are out of sync, many customers find it difficult to plan their spending. Fortunately, there are ways to help clients avoid this source of stress.
The ABC’s Executive Director of Home Buying, Dr Michael Bauman, said: “For many clients, home loan repayments are their biggest regular expense and traditionally repayments are monthly, with the repayment date determined by the settlement date of a property.
Last year, more than 8 out of 10 customers were paid weekly or fortnightly, but for the majority of mortgage customers, their repayments are monthly.
“The new functionality of the CommBank app is designed to give customers the control needed to align their home loan repayments with the timing and frequency of payment. Emerging research suggests that seemingly minor changes, like aligning the a client’s reimbursement day on their payday, can make it easier to manage their finances.
Dr Bauman said customers are increasingly interacting with their bank through digital tools and looking for ways to complete tasks digitally.
“The digital self-service feature gives customers another option for filling out a form or having to speak to their CommBank lender or broker. It adds to our growing suite of powerful digital tools that provide unparalleled support and empower clients to self-serve through the homebuying and homeownership journey,” said Dr. Bauman. .
Going forward, the bank will prompt customers via alerts in the CommBank app to let them know about the new feature and how it could help them better manage their monthly finances.
The new feature complements the ABC’s Home Buying Hub4, already located within the CommBank app.