NASHVILLE—Nearly every credit cards team manager understands the importance of capturing and analyzing data.
They’ve heard all the big-data buzz. Yet, challenges to gaining in-house data analytics and portfolio review capabilities remain.
At TMG’s 2016 TMG Executive Summit here, the company’s vice president of SmartGrowth, Jennifer Davis, made that point to credit unions and community banks facing those challenges—particularly when it comes to growing their credit card programs.
To begin her session, Davis shared a list of industry benchmarks that can indicate a program’s health or its need for additional focus in particular areas. To compare their own metrics against these benchmarks, TMG clients in the audience were encouraged to source TMG’s SmartLook. The web-based data analytics tool provides TMG’s credit- and debit-issuing clients with a visual representation of their portfolios’ performance over time.
Davis suggested cards team managers configure their data strategies to consistently gather and monitor data. As a starting point, Davis said, cards teams should be monitoring the following closely at least on a quarterly basis:
- Credit card penetration
- Active credit cards
- Statused accounts
- Inactive accounts
- Credit card line utilization
- Average balance
- Average number of transactions
- Average ticket
- Delinquency rate
- Charge-off rate
In addition to sharing industry benchmarks for healthy credit card programs, Davis detailed options available to those issuers that have partnered with TMG for payments processing. Namely, she outlined how financial institution staff can take advantage of TMG’s SmartGrowth team of professionals. These individuals help credit unions and community banks analyze, understand and grow their credit card programs. Goals range from creating operational efficiencies and managing risk to developing new credit card products and executing targeted promotions with robust, data-driven campaigns.
“SmartGrowth offers everything from operational reviews and strategic consulting to campaign management,” said Davis. “Our portfolio solutions target your specific areas of concern for a customized action plan to achieve your goals and build a best-in-class card program.”
Davis included in her presentation a series of success stories, including:
The reboot of a dormant credit card program: The financial institution was considering a sale of its credit card program, but engaged the SmartGrowth team instead, explained Davis. The team identified several areas for potential improvement, including a new product offering, reduced staff workload and staff training. As a result, the issuer saw a 650% increase in new account openings (year-over-year).
Excellent start for a new credit card program: The financial institution set a goal of working with the SmartGrowth team to grow its new portfolio to $9 million and achieve customer penetration of 5%, explained Davis.
“In fact, they achieved $13 million and achieved 6% penetration,” she said. Davis attributed the success to improvements in compliance strategy, underwriting criteria and targeted marketing efforts – each executed under the guidance of the SmartGrowth team.