CBA eyes customers' ATO refunds to pay down credit card debt

CBA has added functionality to its app to alert customers when they receive a refund from the Australian Taxation Office, and to prompt them to use it to pay down credit card debt.

The prompts are delivered by the bank's AI-powered customer experience engine (CEE), which is also used to prompt customers to use credit card points and to find and claim government benefits and rebates.

The CEE also provides customers with tens of millions of financial-related suggestions through the CBA app - which the bank calls "digital nudges".

The latest such "nudge" prompts customers with credit card debt "who consistently incur credit card interest" to use some of their tax refund to start paying it off.

It also makes other savings or financial recommendations for the tax return amount.

CBA said that an estimated 3.2 million customers received an ATO refund of $2400 on average.

The bank said that customers were receptive to suggestions on how to use the refund.

"Customers who engaged with the credit card repayment nudge, repaid an average of $541 more in the month following their tax refund," the bank said in a statement.

CBA’s chief data and analytics officer Dr Andrew McMullan said the results "highlight that proactively contacting customers in a targeted manner and at the right time can help them to follow through on their intentions and make meaningful progress towards their goals."