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Time to bring lost revenues back to the cards business

Extended credit services, real time credits and analyzing data you already have can unlock new revenue streams.

Jarkko Turunen / February 19, 2021

If you are in the cards business you know that margins have been steadily shrinking year on year – particularly for debit cards. This is due to many reasons to mention some:

  • Increased competition from new entrants – fintech and neo banks;
  • Decreased fees for card related services;
  • Lost income from interchange fee cap for consumer products in Europe.

As an issuer, you need to find new revenue streams – and the obvious place to start is with credit cards as interest income is still a major revenue stream for cards operations. In our experience, having the ability to migrate transactions between debits and installments or providing products like buy now/ pay later, can bring lost revenues back to a business.

Growing revenues with credit origination

The first thing to start is to look into existing credit origination process. Technological development in the recent years and information availability has opened up new ways how to look on the credit origination process. Credit origination provides yet another great opportunity to grow revenues from existing customer portfolio. Thanks to open banking, multiple sources can now be used to score customers and extend credit services to people who, in the past, wouldn’t have met requirements for higher credit limits. We are also seeing a trend towards real-time credit approvals as opposed to pre-approved agreements. Instant credit origination enables consumers to make purchases, beyond credit limits, when previously the sale would have been declined.

These are the types of automated credit services we provide for our customers to help them turn dwindling markets into growing markets. Of course, a modern infrastructure is essential if you want to offer customers all-encompassing services with buy online, real-time conversions, loan installments and credit limit increases ­– all supported by digital channel and e-signatures.

Data – the key to opening up the market

Moving forward, we believe that third-party collaborations and integrations will become the norm. There is already a great deal of data available, and this will only increase as we get access to account and other relevant data in order to verify salaries and spending patterns. Being able to deliver targeted and timely offers based on this data will influence the way your customers behave and consume services.

No matter if you are a nationwide, regional or global provider, at the end of the day you are going to have to find ways to differentiate yourselves from competitors. In our opinion, the best way to do this is through data, which will come down to the way it’s collected, structured, analyzed and used. Areas where we are already well ahead of the curve and can make sure you are too. No matter if you’re looking for on-prem or cloud based solution we have the tools and the experience to put you at the forefront of the credit market and boost your card’s business bottom line


Related blogs: 

Cut the inconvenience. Make authentication a part of the card customer experience.

Tokenization: the secure way to support merchants, consumers and IoT payments

A digital card experience for a more profitable future 

The third generation of real-time payments is here – are you ready to embrace it?


Learn more on Card and financial product management related blog and insight series, case studies and more - click here.

Jarkko Turunen
Head of Payment Products & Services, Tietoevry Banking
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