Spring is in the air! While this time of year often is associated with spring cleaning, it also can include a clean up of your card portfolio. Reviewing and refining your strategy, tactics, and product mix can help your credit union:
- Stay aligned with member demand and needs
- Provide the best possible member experience
- Drive revenue
- Remain top-of-wallet and obtain designated primary financial institution (PFI)
In just three steps, you can ensure your card portfolio is in top shape.
1. Start with a Portfolio Checkup
Portfolios are most profitable when members are using their cards. The data you already possess provides insight into understanding how members are using your credit union cards and developing your program further. This usage data, alongside industry trends, can provide a complete picture of ways to increase activation and usage, which in turn achieves quantifiable results that drive profitability.
When examining your complete card portfolio and setting strategies to support long-term cards growth, start by:
- Reviewing card activation statistics to track inactive cards or activated cards that have not been used
- Identifying merchants where consumers are using your card; use this information to explore both domestic and international merchant volume
- Viewing card data by BIN to determine high-performing areas of your portfolio or comparing statistics for old and new BINs
- Viewing status trends, such as the volume of card available for use or reported stolen. Download statused card lists to assist in evaluation of cards to be purged from your rolls
When this research has been completed, your credit union can create marketing campaigns targeting specific members to encourage activity that increases usage and transaction volumes. This engagement can be done through incentives and rewards, shared through omni-channel campaigns. While driving usage and adoption, the best campaigns also increase member satisfaction, retention, and foster the relationship they have with your credit union.
2. Check Your Networks
Per the Dodd-Frank Wall Street Reform and Consumer Protection Act, all card issuers must be part of no less than two unaffiliated networks to prevent monopolies and ensure competition remains strong. However, many credit unions belong to more than the two networks required.
Analyze which networks your credit union is participating in and how they are performing. Look at interchange transaction counts, monthly interchange totals, switch fees, and your net position. Using this data, you can select the networks that provide the most value to your credit union and its members and identify spending trends. If you find you are overnetworked, it may be time to reduce participation
3. Prevent Fraud and Reduce Losses By Controlling Card Reissuance
Unfortunately, when fraud is detected (real or suspected), credit unions must notify members and reissue cards. This places a cost burden on your credit union and can impact activation and spend rates negatively. If this happens more than once, members can lose confidence in using your credit union’s card and move to a different one.
By using the latest fraud tools and technology, you may be able to detect potential fraud up to 60 days faster. Your credit union also can use data and intelligence to more precisely identify breaches and set rules about reissuance of individual cards, saving time and money. Card risk scores can help determine when reissuance is needed or can help identify when your risk mitigation strategy may require a tune-up.