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Managing Card Operations in the Age of Immediacy
July 16, 2019
Dondi Black, FIS | Vice President of Payment Strategy
By the fourth quarter in 2018, 842 million EMV® chip cards were deployed in the United States, according to Emvco™. The New York Federal Reserve recently reported 459 million credit cards in circulation. According to the CFPB Consumer Credit Panel, about 66 million credit card originations occur per year, which add to the mindboggling numbers of credit cards in the U.S. – nearly four cards for every person using them.
The task of managing multiple types of cards with varying expiration dates, plus those that must be replaced due to fraud or loss is enormous. Several estimates put the expiration time period for credit cards at about three years. Another expert estimates that 30 percent of cards expire annually due to number change, expiration or account closing.
At the same time, consumers’ expectations regarding their card experiences are evolving. What does it take to meet changing consumer expectations and drive connected experiences leveraging innovation to remain top-of-wallet?
Today’s Primary Target Customer Expects Immediacy
As millennials have entered the workforce in large numbers and are climbing the ladder of earning potential, they become creditworthy. Credit cards companies are wooing them, and a new generation is warming to their offers. A 2015 FICO study showed that 83 percent of young adults aged 25 to 34 uses credit cards and 37 percent stated they were very likely to apply for a new credit card within six months. Also, 67 percent of the surveyed 18 to 24-year-olds used credit cards and 21 percent indicated intentions to apply for a new card within six months.
What do these research savvy consumers want? The FICO study showed they basically want “more for less” – no annual fee, low-interest rate but rewards for their patronage. They also want credit cards that offer account notifications and enhanced security – components of a great mobile banking experience. This digital, raised on “Amazon delivery time” generation also expect near-immediacy, as this comment on FICO Forums indicates:
“When I got approved for my card, I had applied for it on a Saturday night. Got my account set up and everything, and found out the site was down for some maintenance, Then, [the] next morning I checked my app status and it told me I was approved. The following Monday, my card came in the mail all nice and shiny…It shouldn’t take more than a week for it to come in, at the most.”
Issuers can benefit from providing rapid and contextual responses to cardholder needs. For example, this millennial indicates plans to move money to a lower interest rate card immediately upon its receipt:
“Best part of it all, they’re able to FedEx the card out, which should arrive Thursday or, [by the] latest, Friday. I am now much happier than I was yesterday morning – lol. If the card does arrive before this weekend, I’ll put over $3k on it right away.”
Your Card Supplier Should Support a Great Customer Experience
In an era of increasing dependency on cards for payments and high expectations for quick turnaround, today’s complex card operations require a partner with chip card subject matter expertise and an end-to-end solution such as FIS CardPro Connect. Questions to ask potential card suppliers include:
- How does the program ensure cards are delivered on time and right the first time?
- Is real-time data access available to allow your institution to service consumer inquiries and meet their expectations?
- How does the program maximize operations and cost efficiency?
- How do their technologies and systems ensure secure card personalization?
- Are there multiple fulfillment options – direct mail, express shipment, exception handling – available?
- Is there an easy way to view and manage all critical program components such as a real-time web portal with a dashboard?
- Can the card supplier ensure adequate inventory levels for every channel of issuance?