In the 1970s, it took an average of 18 days before a decision could be made on a credit card application. Credit decisioning has come a long way since then, and today, we have the ability to make decisions faster than it takes to ring up a customer in person at the point of sale. Enabling real-time credit decisions helps retail and online merchants lay a platform for customer loyalty while incentivizing an increased customer basket size.
While the benefits are clear, customers still are required to be at predetermined endpoints, such as:
- At the receiving end of a prescreened credit offer in the mail
- At a merchant point of sale applying for retail credit
- In front of a personal computer
The trends clearly show that customers are moving away from these predetermined touch-points where they are finding mailed credit offers antiquated, spending even less time at a retail point of sale versus preferring to shop online and exchanging personal computers for tablets and smartphones. Despite remaining under 6 percent of retail spending, e-commerce sales for Q2 2013 have reportedly been up 18.5 percent from Q2 2012, representing the largest year-over-year increase since Q4 2007, before the 2008 financial crisis. Fueled by a shift from personal computers to connected devices and a continuing growth in maturity of e-commerce and m-commerce platforms, this trend is only expected to grow stronger in the future. To reflect this shift, marketers need to be asking themselves how they should apportion their budgets and energies to digital while executing broader marketing strategies that also may include traditional channels.
Generally, traditional card acquisitions methods have failed to respond to these behavioral shifts, and, as a whole, retail banking was unprepared to handle the disintermediation of traditional products in favor of the convenience mobile offers. Now that the world of banking is finding its feet in the mobile space, accessibility to credit must also adapt to be on the customer’s terms, unencumbered by historical notions around customer and credit risk.
Download this white paper to learn how credit and retail private-label issuers can provide an optimal customer experience in emerging channels such as mobile without sacrificing risk mitigation strategies — leading to increased conversions and satisfied customers. It will demonstrate strategies employed by credit and retail private-label issuers who already have made the shift from paper and point of sale to digital, and it provides recommendations that can be used as a business case and/or a road map.
