Credit Card Product and Portfolio Strategy
The client a top 10 private bank in Malaysia was looking to revitalize its credit card business. In addition, due to the pandemic the overall credit card market had seen decline.
The client was eager to explore different avenues to profitably increase its market share.
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