NASHVILLE, Tenn.–The value of capturing and analyzing data related to plastic cards is well known, but challenges remain when it comes to in-house data analytics and portfolio review capabilities, according to Jennifer Davis, VP-SmartGrowth with TMG.
In remarks to the company’s Executive Summit here, Davis shared a list of industry benchmarks that can indicate a program’s health or its need for additional focus in particular areas. For TMG clients, for example, Davis urged Cus to source the company’s SmartLook, a web-based data analytics tool that 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
Case Studies Are Cited
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. These individuals help credit unions and community banks analyze, understand and grow their credit card programs. According to Davis, those goals range from creating operational efficiencies and managing risk to developing new credit card products and executing targeted promotions with robust, data-driven campaigns.
As examples of where financial institutions have been able to use the solution to improve their own programs, Davis offered as exampes:
- The reboot of a dormant credit card program: One financial institution was considering a sale of its credit card program, but engaged the SmartGrowth team instead, Davis said. 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: Another 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%. In fact, they achieved $13 million and achieved 6% penetration. Davis attributed the success to improvements in compliance strategy, underwriting criteria and targeted marketing efforts -- each executed under the guidance of the SmartGrowth team.