CommBanks buys stake in H2O.ai to boost AI capabilities

CBA will use its relationship with H2O.ai to improve fraud detection and natural disaster predictions, and help customers make better credit decisions.

The Commonwealth Bank of Australia (CBA) has announced it has purchased a minority stake in Silicon Valley-based AI firm H2O.ai with the hope it will help the bank tailor the banking experience for customers.

While the bank has not disclosed the size of its investment, the bank was the lead lead investor in H2O.ai's $100 million Series E growth funding rounding. CBA will also become the exclusive financial services partner for the AI company in Australia and New Zealand. This will give the black and yellow bank access to H2O.ai's AI cloud platform and a full-time team of machine learning engineers that will work within the bank to develop new AI solutions.

"The partnership will further differentiate and extend our artificial intelligence capability to better anticipate customer needs, and reimagine products and digital experiences to meet those needs," CBA boss Matt Comyn said.

"This partnership will accelerate our ability to deliver a broader customer proposition through more personalised experiences, which delivers greater value for our customers."

CBA chief data and analytics officer Andrew McMullan said the bank is already working with H2O.ai on "better fraud detection, better awareness of scams that are increasing across Australia, better credit decisions, and also how do we better predict natural disasters as they occur, we want to better understand when they're likely to happen". 

Over the last couple of years, CBA has been expanding the use of AI and machine learning across its business.

In 2019, CBA introduced its then-new banking app that was underpinned by what it dubbed as "world-leading" machine learning, data analytics, and behavioural science. McMullan, at the time of the launch, said CBA was running over 200 machine learning models on top of 157 billion data sets.

The launch of the app was off the back of the bank having completed the build of its customer engagement engine, which it claimed  was using AI and machine learning to power customer experience.

"[It] is an advanced system which combines AI, machine learning, and our customer data to continuously optimise and prioritise across all of the available messages, alerts, conversations, and communications we can have with our customer at any given time, across all of our channels," McMullan said.

More recently, the bank has turned to AI and machine learning technology to help curb payments that contain abusive transaction descriptions and automate least-cost routing for transactions between Eftpos and international schemes, such as Mastercard and Visa.

"We see broad application for AI and machine learning technology right across our business -- in operational processes, protecting customers from fraud, lending decisions, and risk management. It builds on the foundational data and analytics capabilities that Commonwealth Bank has developed over the past decade," Comyn said.

"We aspire to be the trusted partner at the centre of our customers' financial lives. To do this in an increasingly digital world, artificial intelligence is playing an even more important role in delivering personalised and relevant experiences."

Updated 8 November 2021, 10.25am (AEDT): Details about CBA's investment added.

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