Banking on

Behavioural Science
Commonwealth Bank of Australia
Case Study [October 19, 2023]

Jingqi Yu, Sanskriti Merchant, Bing Feng and Dilip Soman

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Author Affiliations:

Yu, Merchant, Soman: BEAR, University of Toronto

Feng: TD Wealth (this case was prepared when Feng worked for BEAR)

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Behavioural Economics in Action at Rotman;
Behaviourally Informed Organizations Partnership

Rotman School of Management

University of Toronto

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Correspondence and Acknowledgements
For questions and enquiries, please contact:

Dilip Soman / BEAR Office

Rotman School of Management
University of Toronto
105 St. George Street
Toronto, ON M5S 3E6

Suggested citation:

Yu, J., Merchant, S., Feng, B., & Soman, D. (2023). Banking on behavioural science:
Commonwealth Bank of Australia [Case Study]. Behavioural Economics in Action at Rotman
(BEAR), University of Toronto, available at http://www.rotman.utoronto.ca/bear.

Email: [email protected] or [email protected]

Twitter: @UofT_BEAR @dilipsoman

The authors would like to thank William Mailer and team members at the Commonwealth Bank
of Australia for many conversations and interviews that served as the foundation for this case
study. We also thank Rafael Batista, Nathalie Spencer, and David Perrott for insights and
comments, the team at BEAR for many suggestions and advice, and Cindy Luo for editorial
assistance.

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⎯
Table of Contents
1. Introduction ............................................................................................................ 5
2. Back to the Beginning: Before CBA ................................................................... 6
3. The CBA Experiment............................................................................................. 6
4. The Growth and Acceleration .............................................................................. 7
5. Twists and Turns ................................................................................................... 9
6. The Modern Team .................................................................................................. 9
7. Next Era - Broader Focus, New Tools .............................................................. 11
8. Towards the Full Stack Behavioural Science Unit .......................................... 15

List of Figures and Tables

• Figure 1. The evolution of the CBA Behavioural Team

• Figure 2. The Current Team
• Figure 3. Sample behavioural innovations
• Table 1. A selection of the team’s behaviourally driven projects

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1. Introduction
Despite the fact that every organization is fundamentally in the business of behaviour
change of its many stakeholders, not many organizations have successfully embedded
behavioural science into its DNA. One exception is the Commonwealth Bank of
Australia (ASX: CBA), or CommBank, a leading provider of personal banking,
business, and institutional banking, and share broking services in Australia.

CBA’s Behavioural Science unit has driven hundreds of millions of dollars in customer,
business, and societal outcomes, won a range of international awards, and worked to
develop cutting edge research outputs and customer-facing industry innovations.
Today, the team is far from alone; in banking, there are impressive counterpart teams at
banks such as Toronto-Dominion (TD) Wealth, Lloyds Bank, JPMorgan, and
National Westminster (NatWest) Bank. Like many, the CBA story is neither simple nor
linear. Starting out as an experiment of its own, at a time when applied behavioural
science was new, and through various hype cycles and false starts, the team has
reinvented, reshaped, and carved out a strong international reputation. Today, the team
comprises around 25 staff, and around 35 research partners in three different
continents. The unit has much to look forward to, as it continues to grow and reinvent
the model of what a modern full service corporate behavioural science unit could look
like. Figure 1 portrays the evolution of the team since its inception, highlighting exciting
milestones.

Figure 1. The evolution of the CBA Behavioural Team.

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2. Back to the Beginning: Before CBA
The year 2011 was a different time for applied behavioural science. Concepts like
Nudge were just starting to gain traction in business fields, and the book Thinking Fast
& Slow by Nobel laureate Daniel Kahneman had not yet been released. Behavioural
units were scarce in any sector, and even the UK Government, which is a now a
pioneer in the field, had just launched their own Behavioural Insights Team (BIT) as
an experiment with a short sunset clause to self-fund the unit. Opportunities in
behavioural science roles were limited, and the Sydney market was no better.

William Mailer, having recently completed his M.Sc. program at the Centre for
Decision Research and Experimental Economics (CeDEx) in Nottingham, returned
to Sydney and noticed the lack of opportunities in the field. He initially joined
PricewaterhouseCoopers (PwC), a global accounting and consulting firm, where he
quickly connected with Jason Collins, a PwC manager. Their shared passion for
behavioural science sparked an immediate partnership, leading to the establishment of
the PwC Behavioural Economics practice. They also formed the
the Sydney Behavioural Science Network, which eventually grew to include 4,000
members. The launch of the BIT Sydney office (the first behavioural unit on the ground
in Australia) helped generate further interest in the country. The team at PwC went on to
win PwC’s global innovation award and expand their reach with the inception of satellite
teams in Toronto and London.

3. The CBA Experiment

In 2016, Mailer was speaking at a local event, and was approached by a Senior
representative from CBA’s newly formed Financial Wellbeing team. Around the same
time, Collins was coincidentally approached to establish a similar team at a financial
services regulator.

Mailer joined CBA on a six-month contract, serving as a trial period to demonstrate the
value of behavioural science. Amidst the rising support for behavioural science, some
approached its capabilities carefully. The CBA’s behavioural science team was set up
as a type of experiment in itself, at time when the Bank was looking for new and more
effective ways to accelerate their financial wellbeing mission. The team’s differentiating
factor lay in their unwavering commitment to an evidence-based approach,
encompassing meaningful measures, scientific rigor, and a laser focus on driving
positive financial behaviours, surpassing mere literacy or information provision .

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The team’s early efforts came from a lot of “knocking on doors” to find groups in the
bank that had interesting problems, the aptitude for experimentation, and the data.
Mailer initiated tactical trials nationwide to showcase the power of behavioural science.
Trials included reducing “did not attend” (DNA) rates for financial health check
appointments, redirecting staff bonuses towards rainy day savings, and supporting
customers to repay debt.

The team got promising results through these trials, gained an internal following,
received early press coverage, and formed valuable partnerships. A community started
to grow around CBA, as well as connections with other banks, particularly in the UK.
This collaborative approach led to major financial well-being innovation projects with
government entities, regulators, community groups, and banking experts.

In addition to existing collaborations with the BIT, the team achieved two notable
partnerships: one with Behavioural Economics Team of the Australian Government
(BETA) and the other with the Sustainability Transparency Accountability Research
(STAR) Lab at Harvard, led by Professor Michael Hiscox.

4. The Growth and Acceleration

Through a collective effort, the team showcased the differentiated value unlocked by a
behavioural lens, demonstrated tangible impact, and garnered widespread support and
recognition both internally and externally.

Consequently, Mailer was offered a permanent contract and received approval to start
hiring, indicating the unit’s value to CBA. At a conference in Boston, Mailer connected
with Rafael Batista from the Busara Centre for Behavioral Economics. Recognizing
Batista’s expertise, CBA brought him to Sydney to help in growing the team. Aligning
with their commitment to applying behavioural science, the team established a range of
behaviourally informed practices to make sure they were “taking their own medicine.”
This included de-biased recruitment processes, leader speaks last meeting formats, and
regular pre-mortem exercises for major initiatives. In their first recruitment wave, the
team recruited six staff members from five continents, including some incredible talent
that may not have been as easily identified through traditional HR processes. Much of
the team’s early success can be attributed to the fantastic range of diversity in
backgrounds, experiences, and skillsets that the team was able to bring together at this
time.

Over the course of the next three years, the team experienced growth and maturity.
They further developed partnerships, produced a range of research outputs, and began
creating proof of concepts for new types of products. During this time, they were able to

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demonstrate tangible outcomes for customers and for various business lines, attracting
attention internally and externally.

A pivotal moment in the team's history occurred when they launched an ambitious
financial wellbeing event. The idea was to move the bank away from just being a
consumer of behavioural science, but to also being a co-producer. The event brought
together senior executives from CommBank, eight Harvard professors, and partnering
researchers. It comprised 35 behavioural innovation workshops and roundtables
business teams, researchers, community groups, regulators, and advocates, aiming to
prioritize and design breakthrough interventions and innovations in financial services
that were informed by behavioural science. The team addressed important issues such
as debt reduction, building savings, product choice and utilization, retirement planning,
benefit claiming, measuring wellbeing, and implementing experimentation models and
internal interventions like diversity, equity and inclusion (DEI) approaches. The outcome
of these workshops was an extensive list of ideas, from which a number of impactful
projects were prioritized. This includes a collaboration with Ryan Buell and MoonSoo
Choi on operational transparency, the world’s first Financial Wellbeing Scales, several
projects with John Beshears, and the prototype of an innovative offering called the
Benefits Finder, a tool that allowed customers to find and apply for benefits and rebates
that they might be entitled to. These partnerships not only generated ground-breaking
ideas but also paved the way for new projects in the domains of financial wellbeing,
climate action, and internal employee behaviours. These innovations, the partnership,
and the ramp up in activity caught the attention of national media outlets and
international peer banks.

Over time, the unit gained more media attention, group recognition, and industry
experience, which led to approvals for further team expansion. They successfully
recruited exceptional talent from various parts of the world, including the UK, US,
Australia, Mexico, Netherlands, and Kenya. As the team matured, they refined their
ways of working. Engagement models, project prioritization scoring, recruitment
processes, and team positioning and profile evolved and were codified.

The unit transitioned from a charge model based on timesheets to a centrally funded
entity, benefiting from stability and new flexibility to identify priority behavioural
opportunities. They formalized their partnership with the Harvard STAR Lab for research
collaborations. A significant achievement was the development of a world-first shared
research platform, enabling researchers from renowned institutions around the world to
work within secure CBA data environments. Currently, the team collaborates with over
35 researchers from leading research institutions globally through this innovative
research collaboration platform. This platform could potentially be scaled up to conduct
mega-experiments to address questions like financial capability, questions that went
way beyond any one financial institution.

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The team operates across the entire spectrum of behavioural solutions, incorporating a
wide range of approaches. They employ behaviourally informed incentives, boosts, and
sludge removal strategies. Meanwhile, recognizing the importance of domain expertise
in areas such as hardship, financial abuse, and problem gambling, the team avoids
overstating the potential of behavioural science alone. They view behavioural science
as a valuable lens and tool, working alongside traditional approaches such as
incentives, education, pricing, and mandates. In pursuing tailored recommendations, the
team implements a range of tactics, from subtle changes in copy, websites, and call
scripts to impactful initiatives that reshape choice environments and address systemic
factors (S-level changes). These strategic interventions encompass aligning bill dates
with wage deposits, facilitating more frequent pay cheques, reducing or eliminating fees,
and leveraging AI to prioritize opportunities for customers.

5. Twists and Turns

As with any new unit, the team has been through numerous changes and growing
challenges due to organizational and industry shifts. Despite this, they have consistently
adapted and refocused to maximize their impact on customers and collaborate
effectively with partners and stakeholders. Being relatively small within a broader
workforce of 49,000 employees, the team has been careful to prioritize the right
opportunities to have the most positive impact possible. The team looks for those
opportunities that have a clear behavioural element at their core, which are scalable to
large populations, feasible to implement, and which help to improve customers’ financial
lives in important ways.
Carlos Vazquez (Lead, Behavioural Research and Innovation) articulated the process
used to prioritize what the team works on. “The decision is made collegially; there's a
forum where everyone can express an opinion. The projects that get prioritized have
three characteristics. First, there must be a clear business problem that needs to be
solved. Second, that we have the capability to do it. Finally, the project should make a
contribution to applied behavioural science more generally.”

6. The Modern Team

Around 2021, the team rebranded from CommBank Behavioural Economics to
CommBank Behavioural Science to reflect its diverse network, team composition, and
expanded scope. The team currently has 25 members, and works with 35 research
partners in 8 universities across 3 continents (Figure 2).

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Figure 2. The Current Team

Source: William Mailer and Andreas Ludwig

Apart from its growth in size, the team has experienced expansion along two key
dimensions:
1) Background and expertise: It has been particularly fortunate in attracting exceptional
talent, moving beyond the days of hiring economists and social psychologists to now
include field experimentation experts, lab managers, statisticians, data scientists, AI
experts, economists, psychologists, neuroscientists, business / consulting / strategy
experts, and commercial leads. It has evolved into a hybrid team comprising Ph.D.
students and postdocs (in-house), practitioner partnership panels (allowing the team to
flex with demand while working under the team’s model or bringing approved suppliers
into the team), and global research platforms (Harvard, Chicago, Sydney, Melbourne,
UTS, Macquarie, and Toronto). The team is now a member of the Behaviourally
Informed Organizations network (at BEAR, University of Toronto) and the Global
Association of Applied Behavioural Scientists (GAABS).
2) Project focus: With support from senior leadership and changes in Group mission,
the team currently focuses on a) climate action; b) financial health and digital banking;
c) scams and fraud prevention; d) next generation customers’ needs from financial

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services; e) new innovations in experimentation and partnerships; and f) support for
critical national challenges (e.g., COVID, cost of living).
Despite rapid expansion, the team maintains scientific rigor by following strong ethical
guidelines based on literature and global counterpart models. It employs rigorous
methods such as replication hackathons, pre-registration, and multi-context trials. Its
resources prioritize developing robust methodologies and scaling promising findings
within the business. The team’s commitment to research integrity and evidence-based
strategies is reflected in publications and co-publications in leading international
journals. Andreas Ludwig (Principal Behavioural Science) emphasized the importance
of a focus on rigour; “A very successful initiative is bringing academics in to give
presentations on latest research in behavioural science to a wider audience. The
exposure to actual research from the researcher (rather than reading a press report or
summary) is highly valued by executives across the bank. Our pipelines to create
evidence in large scale lab and field experiments allows the team to test the scientific
insights directly in an Australian or specific bank context.”
Ludwig is not the only one to put the spotlight on the scientific approach.
“The behavioural economics unit at CBA is different to the many others that
have been established by other banks around the world simply because it puts
an emphasis on the science. Its major projects have to be good enough to be
published in peer-reviewed scientific journals” (Australian Financial Review,
2019)
Today, the team actively collaborates with global counterpart teams, local community
groups, governments, regulators, advocates, etc. It takes a leadership and cooperative
approach in industry, supporting other behavioural units to establish and grow. They
keep pushing the boundaries of applied behavioural science, propelling innovation to
new heights.

7. Next Era - Broader Focus, New Tools

Today, the world has several hundred behavioural units across a range of sectors,
looking at a range of behavioural challenges in commercial and societal contexts. The
structure of these units is contingent upon various factors, including operating models
and strategic focuses. Some units are situated within a particular vertical (e.g., financial
services), while others are integrated into broader capabilities (e.g., data analytics or
customer experience). Moreover, the home base of a unit may evolve over time as it
progresses. For the behavioural science unit at CBA, it started its life in the digital
business line of the retail bank and now resides now within a “Decision Science”
business domain within the CBA, which also comprises AI, data science, and analytics
capabilities. The team’s proximity to the AI and data science teams in CommBank

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presents unprecedented opportunities, enabling and accelerating the development and
testing of new AI tools and interventions to help customers with more tailored services,
enhance safety, and build trust. As Dan Jermyn, (Chief Decision Scientist)
emphasized, “At CBA, our singular focus with AI is to build a brighter future for our
customers and communities. That’s why we see our behavioural science and data
science capabilities as two sides of the same coin: our innovation in AI has to be
measured through the lens of what it means to the humans who interact with it, driving
better outcomes when theory is put into practice.”
Several exciting and impactful projects have been completed and published, while
others are underway. Table 1 presents a list of the team’s behaviourally driven projects,
showcasing their reach and impact, and Figure 3 provides images for the app interfaces
for some of these innovations.

Table 1. Selection of the team’s behaviourally driven projects.

Project Goal Project Description Project Link

Navigate Benefits Steer customers to valuable https://www.itnews.com.au/news

Identification benefits and rebates, reducing /cba-customers-find-1-billion-in-
(Benefit Finder) complexity. Achieved $1B+ in benefits-590814
claimed benefits.

Visualize Generate monthly breakdowns https://www.commbank.com.au/

Financial Habits of income, spending, savings, digital-banking/cash-flow-
(Cash Flow View) and investments for customer view.html
financial control.
Automate Provide immediate mobile https://www.commbank.com.au/
Transaction feedback on spending. digital-banking/transaction-
Notifications notifications.html?ei=transnotific
ations

Measure Spearhead research into https://melbourneinstitute.unimel

Financial Well- developing a consumer-driven b.edu.au/data-
being definition and measurement of tools/tools/financial-wellbeing-
financial well-being. scales

Encourage Debt Utilize categories, gamified https://finhealthnetwork.org/rese

Payment interfaces, windfalls, and pre- arch/financial-health-solutions-
commitments to accelerate debt using-tax-refunds-for-debt-
repayment. repayment/

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 Understand Leverage representative data to https://papers.ssrn.com/sol3/pap
Budgeting uncover insights into budgeting ers.cfm?abstract_id=3739543
Behaviour behaviours and beliefs.

Promote Staff Initiate nudges for staff savings,

Interventions benefits uptake, and DEI. N/A

Facilitate Bill Help customers anticipate major https://www.commbank.com.au/

Predictions upcoming bills. digital-banking/bill-sense.html
(Bill Sense)

Improve Empower customers with https://www.hbs.edu/faculty/Pag

Operational decision aids for optimal product es/item.aspx?num=55134
Transparency choices.

Match Financial Launch an app feature to align https://www.commbank.com.au/

Events home loan repayments with articles/newsroom/2022/02/CBA
salary payments for better cash -app-feature-home-loan-
flow and financial outcomes. repayments.html

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Figure 3. Sample behavioural innovations.
Benefits Finder:

Source: https://www.commbank.com.au/digital-banking/benefits-finder.html, accessed Oct. 17, 2023

Cash Flow View:

Source: https://www.commbank.com.au/digital-banking/benefits-finder.html, accessed Oct. 17, 2023

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In March 2022, the CBA Group broadened its stated purpose to include focus on
supporting the national economic recovery, reimagining financial services for
customers, and turning more attention to major global challenges like climate action and
financial scams (on top of an ongoing commitment to financial wellbeing). The team
adapted its strategic priorities to align with these broader ambitions and developed new
and specialist research relationships in support. They also put a heightened emphasis
on the scalability and generalizability of their behaviourally informed solutions, aiming to
reach the most representative population.
This focus became more critical when the team noticed significant discrepancies in the
financial literacy test (Lusardi 3) results across audience groups in their own study:
internal bank audience scored 100%, while customers scored 30% (national survey) to
50% (participant cohort). This suggests that many organizations may not have an
accurate view of how people from different communities are managing money and
developing financial strategies, which can lead to misidentifying the highest priority
financial interventions or needs. The team’s observation calls for attention to contextual
factors when developing and evaluating interventions, cautioning against assumptions
that what works in one setting will automatically be effective in another.
To be a driving force in promoting sustainable financial behaviour, the team leads a
national longitudinal study in partnership with Macquarie University, focusing on
Australian young adults. They are also developing a research portfolio in collaboration
with Harvard STAR Lab, assisting customers in reducing carbon footprints, offsetting
carbon activities, and investing in new climate-friendly technologies.

8. Towards the Full Stack Behavioural Science

Unit
The team’s success can be attributed to a number of factors, including: a) an
exceptional talent pool united by a shared vision (concerted and genuine focus on
financial wellbeing); b) top-down support from early on; c) diverse talents (geographies,
training, etc.); d) dynamic and experimental culture at CBA; e) solid infrastructure (time,
space, technology); f) effective partnerships (Harvard, BEAR); g) an organisation with
scale / reach; h) early successes with major national flagship innovations (Benefits
Finder $1 billion milestone).
With its reset, broader remit, and continued results, the team is growing again and
building out skillsets in new spaces: AI, Data Science & Analytics, Ethnography, Design,
Experimentation & Statistics, and Behavioural Science. The team is also in the process
of developing a multi-speed experimentation model to be able to match speed and
rigour with business challenges and stages of programs, including a new experimental
lab partnership (University of Technology Sydney), incentive-compatible online surveys,

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exploratory analyses (ethnographic and data), natural quasi-random designs,
randomized controlled trials, lab-to-field designs, and megastudies.

In this increasingly complex world, the team equips itself with both technologies and
visions to serve the CBA Group’s 16 million customers, contributing to the Group’s
mission of building a brighter future for all. Understanding the prevalence of the
intention-behaviour gap, the team continues to innovate and refine methodologies that
can help customers help themselves along their financial journeys. With the success of
digital tools like Benefits Finder, the team keeps experimenting, launching, and iterating
new features that not only address but also anticipate financial needs for its 8.6 million
digitally active customers. These endeavours have reinvigorated the century-old CBA
Group, playing an indispensable part in establishing CBA as a digital banking leader
who has claimed multiple coveted awards and recognitions, including:
• Canstar Bank of the Year Digital Banking (13 years in a row)
• Forrester Overall Digital Experience Leader (6 years in a row)
• Best Major Digital Bank (5 years in a row)
• Most Innovative Major Bank DBM Australian Financial Awards (5 years in a row)

As with the field of applied behavioural science, the team had started solving last
mile problems but over the years had developed the expertise and gravitas to address
critical first mile problems. As Mailer reflected on the successes and the evolution, he
could not help but wonder what additional capabilities the team would need to build,
what metrics the team should develop to measure the impact of behavioural science in
their work, and what larger and more strategic challenges his team should attempt to
address next.

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