1 00:00:05,160 --> 00:00:06,600 Speaker 1: This is what the Flux. 2 00:00:06,680 --> 00:00:08,600 Speaker 2: I'm Brett and I'm justin and a fun day the 3 00:00:08,720 --> 00:00:09,440 Speaker 2: second of March. 4 00:00:09,840 --> 00:00:12,560 Speaker 1: Boy. We spoke on Friday about Wistech wiping out two 5 00:00:12,560 --> 00:00:15,160 Speaker 1: thousand rolls over the next two years thanks to AI, 6 00:00:15,400 --> 00:00:18,479 Speaker 1: but now Block, the company that owns Afterpay is going 7 00:00:18,520 --> 00:00:21,200 Speaker 1: even bigger. It has plans to cut forty percent of 8 00:00:21,239 --> 00:00:24,640 Speaker 1: its workforce from ten thousand down to just six thousand 9 00:00:24,760 --> 00:00:26,400 Speaker 1: because of its embrace of AI. 10 00:00:26,600 --> 00:00:29,080 Speaker 2: Big moves made by Jack dawks'd man Yeah Fux app 11 00:00:29,120 --> 00:00:31,000 Speaker 2: as we chick off the brand new month. Now is 12 00:00:31,040 --> 00:00:33,240 Speaker 2: the perfect time to be checking whether you're still paying 13 00:00:33,280 --> 00:00:35,800 Speaker 2: for all those subscriptions that you signed up for months 14 00:00:35,800 --> 00:00:38,240 Speaker 2: and years ago you're not using anymore. In the Flux app, 15 00:00:38,280 --> 00:00:40,479 Speaker 2: we have a subscription tracker that identifies all of your 16 00:00:40,479 --> 00:00:43,360 Speaker 2: subscriptions in the one space and helps you identify which 17 00:00:43,360 --> 00:00:45,239 Speaker 2: ones you can cancel. If you want to save some 18 00:00:45,280 --> 00:00:47,280 Speaker 2: money this month, make sure to download the Flux app 19 00:00:47,320 --> 00:00:48,640 Speaker 2: and check out the subscription tracker. 20 00:00:48,720 --> 00:00:51,879 Speaker 1: Three monstrous stories today, Dozy boy, let's do it for 21 00:00:51,960 --> 00:00:55,240 Speaker 1: our first. Commonwealth Bank has dabbed itself in after spotting 22 00:00:55,320 --> 00:00:58,240 Speaker 1: one billion dollars in home loans were backed by dodgy 23 00:00:58,320 --> 00:00:59,680 Speaker 1: AI generated documents. 24 00:01:00,560 --> 00:01:04,760 Speaker 2: Homeland applications just got a little GBT, so tell me more. So. 25 00:01:04,880 --> 00:01:07,640 Speaker 1: Combank is Australia's biggest bank and one of the biggest 26 00:01:07,680 --> 00:01:09,320 Speaker 1: companies in all of Australia. 27 00:01:09,319 --> 00:01:11,759 Speaker 2: We're talking more than twenty five million customers and more 28 00:01:11,800 --> 00:01:14,640 Speaker 2: than ten billion dollars in profit last financial year. Blah 29 00:01:14,640 --> 00:01:14,959 Speaker 2: blah blah. 30 00:01:15,680 --> 00:01:19,280 Speaker 1: Now Combank has referred itself to police and ASSEK and 31 00:01:19,280 --> 00:01:21,920 Speaker 1: why is that? That's because they've identified up to one 32 00:01:22,040 --> 00:01:24,920 Speaker 1: billion dollars in potential fraudulent home loans. 33 00:01:24,959 --> 00:01:27,360 Speaker 2: And be Man. This wasn't old school wide out and 34 00:01:27,440 --> 00:01:28,319 Speaker 2: photoshop staff. 35 00:01:28,360 --> 00:01:33,080 Speaker 1: Now some applications allegedly used AI generated pacelips, draft tax 36 00:01:33,120 --> 00:01:36,040 Speaker 1: returns and wait for it, fake income documents to secure 37 00:01:36,080 --> 00:01:36,880 Speaker 1: loans and be man. 38 00:01:36,959 --> 00:01:39,920 Speaker 2: Interestingly, there was a major focus on broker and other 39 00:01:40,000 --> 00:01:40,920 Speaker 2: referral channels. 40 00:01:40,959 --> 00:01:43,440 Speaker 1: The good news for CBA well, most of these loans 41 00:01:43,440 --> 00:01:45,959 Speaker 1: are still being repaid and are secured against property, so 42 00:01:46,040 --> 00:01:48,520 Speaker 1: CBA isn't currently out of pocket. But the band news 43 00:01:48,680 --> 00:01:50,880 Speaker 1: this isn't just one or two false documents. 44 00:01:51,000 --> 00:01:53,480 Speaker 2: No, no, no, this is at scale, so it raises serious 45 00:01:53,560 --> 00:01:56,560 Speaker 2: questions about lending controls. But mainly broker oversight. 46 00:01:56,720 --> 00:01:58,600 Speaker 1: Interesting, So what is the key learning here? 47 00:01:58,800 --> 00:02:02,760 Speaker 2: Growth through intermediary can accelerate revenue, but it also multiplies 48 00:02:02,800 --> 00:02:03,720 Speaker 2: the oversight risk. 49 00:02:04,320 --> 00:02:07,080 Speaker 1: We know that banks don't originate every home loan themselves. 50 00:02:07,080 --> 00:02:09,720 Speaker 2: In fact, a large proportion come through mortgage brokers and 51 00:02:09,800 --> 00:02:12,880 Speaker 2: other referral partners like accountenance or real estate agents. 52 00:02:13,000 --> 00:02:15,200 Speaker 1: Get this one. The broken channel now makes up more 53 00:02:15,240 --> 00:02:18,400 Speaker 1: than seventy seven percent of all new loans originated, and 54 00:02:18,560 --> 00:02:21,399 Speaker 1: that is as of the September quarter in twenty twenty five. 55 00:02:21,440 --> 00:02:23,639 Speaker 2: The good part for banks is that this model expands 56 00:02:23,680 --> 00:02:26,160 Speaker 2: their distribution and brings in more customers. 57 00:02:25,800 --> 00:02:28,760 Speaker 1: Less people actually working for the bank but still making 58 00:02:28,840 --> 00:02:29,560 Speaker 1: sale but. 59 00:02:29,520 --> 00:02:32,359 Speaker 2: Of course be man without the overriting control of these brokers. 60 00:02:32,400 --> 00:02:34,280 Speaker 2: It also introduced incentive risk. 61 00:02:34,400 --> 00:02:37,160 Speaker 1: Yeah, brokers are typically paid upfront commissions when a loan 62 00:02:37,200 --> 00:02:39,600 Speaker 1: sales plus a trail, so there's a clear. 63 00:02:39,400 --> 00:02:41,919 Speaker 2: Financial incentive to get the deal across the line. 64 00:02:41,919 --> 00:02:43,919 Speaker 1: In most cases this works fine. 65 00:02:43,639 --> 00:02:46,200 Speaker 2: But in some rare cases and clearly not so rare 66 00:02:46,280 --> 00:02:49,280 Speaker 2: right now, incentives can encourage brokers to cut corners in 67 00:02:49,320 --> 00:02:52,680 Speaker 2: flight income figures, or ignore inconsistencies altogether. 68 00:02:52,919 --> 00:02:57,160 Speaker 1: For our second story, Woolworth's AI assistant Olive has gone 69 00:02:57,280 --> 00:03:00,600 Speaker 1: rogue and shoppers are not loving the family drama. 70 00:03:01,160 --> 00:03:03,800 Speaker 2: You go online to reschedule a grocery delivery and somehow 71 00:03:03,840 --> 00:03:06,280 Speaker 2: you end up in a therapy with the chatbot. Don't 72 00:03:06,320 --> 00:03:06,960 Speaker 2: tell me more so. 73 00:03:07,040 --> 00:03:10,800 Speaker 1: Woolworth's Group is Australia's biggest supermarket chain, and financially it's 74 00:03:10,840 --> 00:03:12,560 Speaker 1: back to its humming best yep. 75 00:03:12,680 --> 00:03:15,360 Speaker 2: Just last week it reported earnings up more than fourteen 76 00:03:15,360 --> 00:03:17,320 Speaker 2: percent in the first half of the financial year and. 77 00:03:17,320 --> 00:03:20,480 Speaker 1: Sales rising to over thirty seven billion bucks for the 78 00:03:20,560 --> 00:03:21,440 Speaker 1: half alone. 79 00:03:21,560 --> 00:03:23,720 Speaker 2: But be man, that ain't the story today, because back 80 00:03:23,760 --> 00:03:26,320 Speaker 2: in twenty eighteen, will These Digital arm Will These X 81 00:03:26,400 --> 00:03:28,120 Speaker 2: launched its AI chatbot, Olive. 82 00:03:28,160 --> 00:03:30,600 Speaker 1: The mission here was to handle all the boring stuff 83 00:03:30,680 --> 00:03:33,720 Speaker 1: store hours, refunds, delivery tweaks. 84 00:03:33,480 --> 00:03:36,160 Speaker 2: But instead Olive started oversharing yep. 85 00:03:36,280 --> 00:03:39,640 Speaker 1: Lately, customers have reported that Olive has been rambling about 86 00:03:39,720 --> 00:03:40,440 Speaker 1: its mother. 87 00:03:41,120 --> 00:03:43,760 Speaker 2: And making odd typing noises all the while during the 88 00:03:43,800 --> 00:03:45,840 Speaker 2: time when people just wanted to move their groceries from 89 00:03:45,880 --> 00:03:46,920 Speaker 2: four pm to six pm. 90 00:03:47,200 --> 00:03:50,440 Speaker 1: Yeah, Wooly said the awkward behavior came from old scripted 91 00:03:50,480 --> 00:03:53,480 Speaker 1: responses written to make Olive feel more human. 92 00:03:53,240 --> 00:03:55,480 Speaker 2: And those scripts have now been removed. 93 00:03:55,160 --> 00:03:57,360 Speaker 1: But it hasn't stopped old woolies. In fact, they've been 94 00:03:57,360 --> 00:04:01,440 Speaker 1: doubling down on AI, recently partnering with Google two upgrade Olive. 95 00:04:01,560 --> 00:04:04,120 Speaker 2: Yeah, seems like Olive needs an upgrade. The goal is 96 00:04:04,160 --> 00:04:07,640 Speaker 2: to developed more advanced capability like meal planning and even 97 00:04:07,640 --> 00:04:09,480 Speaker 2: building a cart from a photo. 98 00:04:09,280 --> 00:04:13,440 Speaker 1: And not trauma dumping on its customers about its family issues. 99 00:04:13,840 --> 00:04:15,280 Speaker 2: So what is the key learning here? 100 00:04:15,400 --> 00:04:18,360 Speaker 1: Customer service isn't just a cost center, it's a key 101 00:04:18,560 --> 00:04:19,520 Speaker 1: brand touch point. 102 00:04:19,520 --> 00:04:21,920 Speaker 2: I mean, man. The irony is the companies often roll 103 00:04:21,960 --> 00:04:24,920 Speaker 2: out AI to feel more modern and customer centric. 104 00:04:24,520 --> 00:04:27,719 Speaker 1: But if it feels inauthentic or unreliable, it can quickly 105 00:04:27,880 --> 00:04:30,200 Speaker 1: ruin the very trust they're trying to build. 106 00:04:30,640 --> 00:04:32,320 Speaker 2: And this isn't the first AI flop. 107 00:04:32,440 --> 00:04:36,320 Speaker 1: Now, remember when McDonald's scrapped an AI drive through after 108 00:04:36,360 --> 00:04:39,040 Speaker 1: it kept adding hundreds of markets to every order. 109 00:04:39,360 --> 00:04:41,320 Speaker 2: Or what about when Air Canada was forced to honor 110 00:04:41,360 --> 00:04:44,680 Speaker 2: a bereavement discount It was invented by its AI chatbot. 111 00:04:44,960 --> 00:04:48,279 Speaker 1: So AI might promise efficiency and cost savings, but when 112 00:04:48,279 --> 00:04:50,840 Speaker 1: it comes to the frontline of your brand, it also 113 00:04:50,839 --> 00:04:52,680 Speaker 1: becomes the frontline of your reputation. 114 00:04:53,200 --> 00:04:56,239 Speaker 2: For our third and final story. Budget Direct has landed 115 00:04:56,279 --> 00:04:59,839 Speaker 2: in some hot water after Asak alleges vanishing discounts for 116 00:05:00,080 --> 00:05:02,040 Speaker 2: thirty nine thousand of its customers. 117 00:05:02,080 --> 00:05:04,839 Speaker 1: Nothing like a discount that disappears faster than your no 118 00:05:05,120 --> 00:05:06,839 Speaker 1: claims bonus. Tell me more. 119 00:05:06,920 --> 00:05:09,280 Speaker 2: Okay. So Budget Direct is the low cost insurer that's 120 00:05:09,279 --> 00:05:11,600 Speaker 2: owned by Auto in General. They are for car insurance 121 00:05:11,640 --> 00:05:14,600 Speaker 2: and home insurance, motorbike insurance all across Australia. 122 00:05:14,640 --> 00:05:17,279 Speaker 1: It built its brand on competitive pricing and those save 123 00:05:17,360 --> 00:05:19,720 Speaker 1: up to thirty percent style discounts. 124 00:05:19,560 --> 00:05:22,240 Speaker 2: But now be man Ascic alleges the Budget Direct has 125 00:05:22,279 --> 00:05:24,960 Speaker 2: been pulling some swifties on its customers. Whether it's pricing. 126 00:05:25,040 --> 00:05:28,560 Speaker 1: You have Ascic alleges that Budget Direct removed advertised discounts 127 00:05:28,640 --> 00:05:31,080 Speaker 1: after customers made small changes to their policies. 128 00:05:31,080 --> 00:05:33,320 Speaker 2: You want update your address, you lose your discount or 129 00:05:33,320 --> 00:05:33,520 Speaker 2: if you. 130 00:05:33,520 --> 00:05:36,479 Speaker 1: Want to swap your car, discount gone and after thirty 131 00:05:36,560 --> 00:05:39,760 Speaker 1: nine thousand customers were allegedly affected and Joe boy Acid 132 00:05:39,800 --> 00:05:42,360 Speaker 1: claims senior staff were aware of the issue as far 133 00:05:42,440 --> 00:05:45,120 Speaker 1: back as twenty sixteen, but failed to fix it or 134 00:05:45,279 --> 00:05:46,280 Speaker 1: inform their customers. 135 00:05:46,279 --> 00:05:48,919 Speaker 2: So now Budget Direct will repay affected customers to the 136 00:05:49,000 --> 00:05:51,080 Speaker 2: tune of three point three million bucks. 137 00:05:51,120 --> 00:05:53,880 Speaker 1: And clearly, pricing transparency has become a key focus for 138 00:05:53,920 --> 00:05:56,720 Speaker 1: Assic in the insurance space. So what is the key 139 00:05:56,800 --> 00:05:59,960 Speaker 1: learning here? In financial services? Your headline price isn't just marked, 140 00:06:00,320 --> 00:06:02,560 Speaker 1: it's your promise to customers. 141 00:06:02,880 --> 00:06:04,880 Speaker 2: We know that discounts are often the hook that gets 142 00:06:04,920 --> 00:06:06,520 Speaker 2: customers across the line, but if. 143 00:06:06,440 --> 00:06:10,120 Speaker 1: That hook changes after sign up, even unintentionally, regulators view 144 00:06:10,160 --> 00:06:13,479 Speaker 1: that as potentially misleading conduct. If customers can't rely on 145 00:06:13,520 --> 00:06:16,960 Speaker 1: headline pricing, the entire comparison based insurance market breaks down. 146 00:06:17,000 --> 00:06:20,160 Speaker 2: And bevan Atik has been cracking down hard on misleading pricing. 147 00:06:20,240 --> 00:06:22,800 Speaker 1: In fact, insurance were forced to repay eight hundred and 148 00:06:22,839 --> 00:06:25,920 Speaker 1: fifteen million dollars to five and a half million consumers 149 00:06:25,960 --> 00:06:28,760 Speaker 1: back in twenty twenty three alone because of pricing failures. 150 00:06:28,800 --> 00:06:31,320 Speaker 1: So clearly ACIK is clamping down on these practices, and 151 00:06:31,440 --> 00:06:33,719 Speaker 1: right now Budget Direct is in the firing. 152 00:06:33,440 --> 00:06:35,599 Speaker 2: Line fluck time. I can guarantee you if you check 153 00:06:35,600 --> 00:06:38,159 Speaker 2: your subscriptions in the Flux subscription tracker, you will find 154 00:06:38,160 --> 00:06:40,240 Speaker 2: one that you did not even know you're paying for. 155 00:06:40,440 --> 00:06:42,320 Speaker 2: We hear it all the time from our customer saving 156 00:06:42,360 --> 00:06:44,400 Speaker 2: twenty bucks here a month, thirty bucks they're a month 157 00:06:44,440 --> 00:06:46,360 Speaker 2: and hundreds per year, so if you want to save 158 00:06:46,400 --> 00:06:48,200 Speaker 2: money to kick off March, make sure to download the 159 00:06:48,200 --> 00:06:50,080 Speaker 2: Flex app and check out the subscription tracker. 160 00:06:50,160 --> 00:06:52,640 Speaker 1: Thanks for listening, and we'll see you on Wednesday.