Regional Banks Cross Selling Own Credit Cards
A recent Wall Street Journal article titled “Regional Banks See Advantages in Issuing Their Own Credit Cards” highlighted the trend of regional banks taking back their credit card businesses that were outsourced to the big card issues. According to the article, the reversal of the decisions made a decade ago is to counteract weaknesses in demand for other loan products and the surplus of customer deposits.
One of the banks mentioned expects to grow the portfolio that they are buying back by more than 10% in the next 18 months. The article goes on to state the strategy of the regional banks to achieve this growth is to avoid competing with the four largest card issuers, who collectively own 65% of the credit card business. Instead, the regional banks will focus on selling to their own banking customers and then encourage those customers to make purchases with the bank’s card. The expectation of bringing in the credit card portfolio and cross-selling those credit cards to existing customers is, besides loan growth, to improve loyalty and increase profitability from existing customer relationships.
The key challenge for the regional banks in this strategy is to be able to cross-sell effectively to their customer base. In a prior article we explored the challenges to effective cross-selling. As we mentioned in another article, cross-selling at the point of interaction with instant prescreening, both when booking an account and when servicing and account, clearly is an important approach to complement the different campaigns including direct mail and email campaigns. The important capability is to be able to make offers that result in optimized product relationships based on the customer’s needs and overall customer profitability. Advanced analytical techniques, including propensity modeling and relationship optimization are keys to these solutions.
Banks are implementing these today. If you want to learn more reach out to your Equifax representative or send us an e-mail
This post was contributed by: Karthik Mani.
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