Commonwealth Bank of Australia: Unbanklike Experimentation

In August 2017, the Commonwealth Bank of Australia was looking for ways to differentiate itself from competing banks and also sought to improve the financial well-being of its clients. One area where this was particularly relevant was the bank-issued credit card business, where customers routinely selected cards that, while profitable for the bank, did not meet customer needs, resulting in low credit scores. Satisfaction, cancellations, and sometimes financial difficulties addressed. To this end, the company’s behavioral economics team developed a provocative experiment called “The Good and the Bad.” Rather than just showcasing the strengths of various credit card offerings, they suggested promoting the less obvious drawbacks of each credit card as well. Being transparent with clients could help them make better decisions, but would those decisions be at the expense of the bank’s performance? Should a company opt for sales prevention?

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