The 5 ‘Cans’ of Creating a Successful Card Program

Card programs can be significantly valuable to credit unions and their members; credit unions benefit from a recurring income stream and members’ payments needs are met. While offering cards is a first step, card programs that meet performance expectations must be supported by ongoing analytics that generate actionable insights. Card analytics provide insights on important program details, such as where cardholders are making card purchases and the resulting interchange income. If this information is easy to access and aggregate, and presented in understandable formats, credit unions can then segment cardholders, view trends, better understand their members’ needs and ultimately generate meaningful cross-sales opportunities, promotional offers and incentives.

These five questions can determine if a credit union has the tools needed to maximize card portfolios and make data-driven decisions.

1. Can you deploy effective, highly targeted promotions based on your cardholders’ behavior?

Credit unions need relevant promotions to make their cards top-of-mind, wallet and app. Card usage and merchant categories can help direct the most meaningful offers. For example, a credit union might find it generates more interchange income at wholesalers than retailers, but cardholders shop more at retailers. In response, incentive campaigns can be created to encourage wholesaler purchases.

2. Can you quickly identify a card information breach?

Creating a compromised account list is critical to the safety and security of cardholders. Generating these lists can take weeks or months based on the card network or if the lists must be built using cumbersome templates. These ineffective processes place both the credit union and its members at unnecessary risk. When a data breach happens at a major retailer, a credit union should be able to seamlessly and immediately create a compromised card list, monitor the affected cardholders and reissue cards if necessary.

3. Can you identify inactive or low-use cardholders on demand?

Cardholder activity and usage should be easily segmented by portfolio and product, and used to create relevant campaigns and rewards programs. Imagine compiling a list of cardholders who have been inactive or had minimal activity during a specific timeframe. Armed with this information, the credit union could prepare marketing or incentive plans to encourage usage, or develop education and resources to maximize card programs and ultimately modify cardholder behavior.

4. Can you determine fraud trends with current, accurate data?

Members trust their credit union to provide strong security in every channel. This is table stakes for keeping cards top-of-wallet and app. Credit unions need a dashboard view of fraud key performance indicators, including fraud rules performance, blocked transactions, and the results of anti-fraud efforts. Card fraud programs must be supported by ongoing reporting on the losses, recoveries and relevant fraud data including which merchants and merchant categories are impacting fraud claims the most. Cardholders should also be empowered to set their own controls on spending limits, geographical limits, merchant restrictions and transaction alerts.

5. Can you access the data needed for strategic planning?

Credit unions need ongoing access to current, accurate peer and benchmark data to support the strategies driving diverse card programs. They should understand how card programs compare to competitive programs offered by similar asset-sized institutions. Both KPIs and peer data can help credit unions identify growth opportunities, including more competitive merchant incentive programs or targeted rewards programs. Hard-to-use reporting templates and incomplete or inaccurate data is detrimental to card programs.

If your credit union answered “no” to any of these questions, it’s time to re-evaluate card processors and partners. Successful credit unions are leveraging data and analytics to optimize marketing campaigns, influence cardholder behavior and increase card usage, and ultimately grow interchange revenue. Turning the can’t into cans is how credit unions can develop efficient, effective, more profitable card portfolios and programs.

Phil Tollison is the head of card processing solutions at Jack Henry & Associates a Monett, Mo.-based provider of technology solutions and payment processing services primarily for the financial services industry.