Commonwealth Bank of Australia (CBA) has restated its plan to invest more than $5 billion mostly on technology over the next five years, to maintain its leadership position in digital banking.\nThe bank today also announced an investment in a'buy now, pay later' fintech, and detailed efforts to fend off the threat of neobanks through improved digital offerings.\n\u201cA key pillar of our strategy, and of our customer offering, is being the best in digital,\u201d CBA CEO Matt Comyn said in the bank\u2019s 2019 annual report released today.\n \n\u201cWe plan to invest over $5 billion over the next five years with much of that going into technology to keep improving our systems and services, and to maintain our leadership position,\u201d he continued.\n \nThe bank continues to be the leader in digital banking in Australia, with seven million active digital customers, 5.6 million of them using the CommBank app.\n \nBoth CBA\u2019s online banking and its app have Net Promoter Scores \u2013 a standard metric of customer satisfaction \u2013 that are significantly higher than its Big Four rivals for both its retail banking consumers and business customers.\n \nA recent review of the apps offered by Australia\u2019s biggest banks by Forrester found CBA\u2019s to be the best, for the third year in a row. That assessment came before the launch last week of the bank\u2019s \u2018fourth generation\u2019 app which it says offers customers greater personalisation, more features to help people save and a simplified experience.\n \n\u201cWe have an unrivalled leadership position at the moment in digital,\u201d CBA CEO Matt Comyn said in a video message today.\n \nThe focus on digital is paying off. The proportion of total transactions made via digital channels rose to 63 per cent in June this year the results noted, up from 59 per cent the same month last year.\n \nThe bank is not getting complacent about its digital leadership, however. Being \u2018best in digital\u2019 is a strategic priority for the bank, ahead of the arrival of the Open Banking regime which will enable customers to direct that their bank release data, via an API, relating to their use of the bank\u2019s services to a third party.\n \nCrucially it will make it easier for consumers to move between banks, and find better deals. CBA said consumers will be able to share their data \u2013under the Open Banking regime \u2013 from February next year, with a second phase of data sharing from July 2019.\nTo deliver on its best in digital strategy \u2013 as well as moves to simplify its business \u2013 the bank says it is working to reduce costs, to give it more funds to invest in data and analytics and innovation.\n \n\u201cWe are committed to lowering our cost base to create the capacity to invest in market-leading technology and service, in order to deliver the best offering for our customers and performance for the bank. This will help us meet the challenges of increased competition,\u201d Comyn said.\n \nRun costs are being reduced by \u201crationalising our technology architecture and the number of IT systems we use\u201d as well as consolidating applications and decommissioning ones that aren\u2019t well used. Comyn also highlighted the bank\u2019s move to a \u201cmore modular and cloud-based architecture\u201d which will enable it to increase \u201cthe pace of innovation\u201d.\n \nTo further \u201cextend our digital capabilities\u201d the bank today announced a US$100 million investment in \u2018buy now, pay later\u2019 firm Klarna. CBA will become the Swedish fintech\u2019s exclusive partner in Australia and New Zealand, the bank said.\n \nKlarna \u2013 a disruptor in the payments space and potential major bank challenger \u2013 is marketed as a credit card alternative, allowing shoppers to buy items and pay later, in instalments or a lump sum, typically without paying interest if they pay on time. \nIT was the main driver of the bank\u2019s increased operating expenses, however, increasing eight per cent on the previous financial year to $1,904 million. This was due to a \u201chigher investment spend particularly on risk and compliance initiatives\u201d.\n \nThese have included numerous \u201cdata quality\u201d improvement efforts to support reporting and risk decision making, and \u201crisk systems and innovation\u201d to better identify and analyse \u201cissues and complaints\u201d.\n \nOverall, the bank reported a $8.49 billion cash profit for the full year, down 4.7 per cent. This was a result of higher operating expenses, customer compensation costs and reduced income from fees.