Group Strategy Creation & Transformation Execution
One of the largest banks in Zambia want to create 3-year road map to become a top transactional bank in Zambia.
This included business transformation, technology rationalization and creation of a digital banking platform which was previously not present.
In addition, the bank wanted to relook at its credit and operational risk practices
Impact
25% Increase in Card Fee Collection
30% Lower Delinquency
28% Higher Spends Per Card
--> Lower Cost of Operations
--> Increase in Efficiency
--> Digital Distribution
Approach & Key Challenges
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- Steady decline in the overall credit card issuance and usage – post pandemic
- Rising credit costs and government sanctions on financial institution.
Analysis of data led to the following discoveries
- Free Issuances of Premium Cards has led to dilution of brand value and thus low utilization with high spenders.
- Card products had shifted to lower segment than target market.
- This shift was leading to
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- Higher credit costs
- Lower spends per card
- Lower MDR earnings
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- Dilution of CVP
Recommendations
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- Restoration of Market Positioning by enriching CVP and increasing product pricing
- Free card issuance limited to mass / mass affluent segment