The bank has introduced efficiencies that benefit customers and business.
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Zach Bristow Zach is an equities analyst at a mid-sized investment boutique. Published November 29, 8:00 am AEDT
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The Commonwealth Bank of Australia (ASX: CBA) share price is again in focus as the bank continues to assert its dominance as the ASX’s largest company by market capitalisation.
The banking stock is up more than 42% this year to date and has surpassed all major benchmarks to the delight of shareholders. It has also paid dividends of $4.65 per share in the last 12 months
Despite a brief stumble on the chart this week, the CBA share price closed 0.64% higher at $158.58 on Thursday after the bank revealed it has been making strides in artificial intelligence (AI).
The Commonwealth Bank says its AI initiatives are not only enhancing customer experience but also reducing fraud and streamlining business operations. Here’s a closer look.
AI for businesses and the customer
The Big Four bank says its adoption of generative AI (Gen AI) is already delivering measurable benefits.
AI-powered tools such as NameCheck and CallerCheck have reportedly contributed to a 50% reduction in customer scam losses and a 30% decrease in reported fraud cases.
The bank now flags thousands of suspicious transactions daily, sending proactive alerts to customers via its app.
With more than one in three Australians and almost one in four businesses considering us their main financial institution, we have a huge customer base to serve. Their preferences and expectations continue to shift, and we aim to meet them by delivering distinct, differentiated and compelling propositions.
Technology, and AI in particular, are critical in meeting this ambition. AI allows us to deliver better experiences to more customers at a faster rate, and we’re already seeing significant benefits in a variety of use cases.
Gen AI-powered messaging has also enhanced customer service, cutting call centre wait times by 40% while improving response speed and precision for both retail and business customers.
On the loan side, all documents will be pre-populated using AI tools, which could result in “conditional approval in less than 10 minutes”.
If only AI could predict the future direction of the CBA share price with full accuracy.
It’s not all about the customer
Commonwealth Bank’s AI initiatives also extend beyond customer service and fraud prevention.
It has established 11 ‘guardrails’ to protect its AI models from potential threats, along with “malicious inputs and misleading outputs”.
As to the source of all this newfound AI firepower, the bank says it has been outsourcing most of it.
The bank, which in 2024 purchased the equivalent of 100% renewable electricity for its Australian operations, including its Australian data centres, sources much of its AI computing capacity from third party providers.
Whatever the case, investors bid up the CBA share price yesterday, closing the session near its former highs of circa $160 apiece.
Shares were down earlier in the week, shedding 2.75% in a single session, possibly due to profit-taking after a strong run this year.
CBA shares takeout
The CBA share price finished higher on Thursday, reversing losses from earlier in the week. The bank revealed it was making inroads into AI by integrating into its operations.
In the last 12 months, CBA shares have climbed almost 54%.
Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
