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  5. Card Issuers: Unleashing the Potential of the Internet for Sales and Service

Card Issuers: Unleashing the Potential of the Internet for Sales and Service

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5 January 2005

Abstract

San Francisco, CA, USA January 5, 2005

Celent Communications evaluates the state of online cardholder sales and services and finds that while there are clear best practice players, the majority of issuers are behind the curve.

Are there any new frontiers in online financial services? Surprisingly, there are, right under the noses of IT- intensive card issuers. While issuers have customer segmentation and product manufacturing down to a fine science, distribution and customer care remain seemingly old-fashioned and reliant on one channel for customer acquisition (direct mail) and another for customer service (call center/AVR). The fact that most card issuers have not put significant effort into their online cardholder services is evident in relatively low adoption. There are as many active cardholders online now as there were active online banking users in 2002.

According to Alenka Grealish, coauthor of the report and manager of the banking group at Celent, "Card issuers that have excelled in online sales and services have treated the Internet as a separate channel rather than a separate business. Moreover, they have leveraged it not just as a passive channel (e.g., customer self-service) but also as a proactive marketing channel. They have discovered that at numerous points along a customer痴 life cycle庸rom the information-intensive customer attraction and acquisition phases to the customer service phase葉he Internet channel not only improves results but also lowers cost. By building better online sales and service, issuers are finding預s did their counterparts in the retail bank葉hat more customers will come and that active online customer rates over 30 percent are achievable."

Ariana-Michele Moore

, coauthor of the report and senior analyst, adds "The Internet also provides a very favorable and cost-effective channel to serve cardholders without diminishing quality of service. In a competitive environment where cardholders churn over the slightest bump in service and margins are dwindling, this is quite significant."

This 41-page report contains 11 figures and five tables. A table of contents is available online.

of Celent Communications' Retail Banking research service can download the report electronically by clicking on the icon to the left. Non-members should contact info@celent.com for more information.

Send mail to info@celent.com with questions or comments about this Web site.

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