In August 2012, the credit cards issued by Industrial Bank (IB) broke through 10 million pieces, stepping on a new stage successfully. Looking back at the development of credit card business in recent years, IB has always kept a development situation of “making steady progress” from starting as a toddler to achieving fast development, and from purely pursuing scale expansion to realizing the transformation of “tailoring to the needs of specific groups”. Since 2007 in particular, the Credit Card Center of IB has, centering on the business tenet of “increasing scale, stressing quality and creating profits”, kept pushing product construction vigorously, accelerating marketing innovation, stressing the improvement of customer experience, and in this way, the center has enhanced its service functions day by day, elevating its market competition and brand reputation continuously.
Till the end of the third quarter of 2012, the trading volume registered by the credit cards of IB totaled RMB 115.952 billion, and with a non-performing ratio of 0.94%, the asset quality kept a leading position in the credit card sector.
Sizing up situation and forging ahead in exploration
IB released its first credit card in 2004, witnessed profits in the area in 2009, and issued over 10 million credit cards by 2012. The bank has sized up the situation all the way, namely, on the basis of judging the external environment accurately and making in-depth analysis over its own characteristics, it has kept exploring and trying to find a business road suitable for its own development.
1. Adhering to the strategy of blending into large-retail. Depending on the large-retail framework of the entire bank, IB has carried out crossed marketing through product innovation and released such innovative products as one form and two cards, card application with pledge, and Business Express credit card. Meanwhile, it has intensified the linkage with personal housing loan, incorporating it into the retailing business of the whole bank gradually.
2. Taking the initiative to make adjustment to business operation model and explore business operation characteristics. According to changes in the external environment of credit card business, the bank has pushed the credit card business to transform from extensive operation to tailored intensive operation in the following ways: implementing assessment over the first use in the promotion of card issuance to improve active ratio of credit cards; carrying out data excavation and database marketing to enhance the accuracy and efficiency of credit card marketing; pushing forward the construction and implementation of customer relationship management and adhering to tailored intensive operation and differentiated marketing; making great efforts to develop high-end credit card products to improve the core competitiveness.
3. Sticking to risk control and improving the refined level of risk management. The bank has attached more weight to quality and benefits during operation, carried out more human-oriented risk control and management, actively sought the balance of risk control with scale expansion and customer service experience.
4. Building service consciousness firmly. The bank has established a service quality supervision committee and a service quality management office, responsible for managing the quality of credit card service, making in-depth analysis over service complaint cases, and improving services at all processes and links to enhance the service satisfaction. It has gradually realized online marketing and active outbound marketing to customers and transformed from maintaining customer value to creating customer value.
Structural adjustment and development in optimization
In recent years, “structural adjustment” was a key point considered by the Credit Card Center of IB in developing business. From product and customer structure to trading and asset structure, its optimization showcased IB Credit Card Center's development concept of “intensifying quality management and pushing forward refined transformation of businesses sturdily”.
The precondition for “structural adjustment” is to realize differentiated operation of product system. In recent years, orienting at three groups of customers with “high net worth, high value, and great growth”, IB Credit Card Center adjusted product design concept to implant preferential rights and benefits of high-end products extensively into auto, aviation and business travel credit card products, and implement the concept into the development of new products and upgrading of original products, so as to keep improving its product system and meeting the different demands of customers. In the latest years, IB Credit Card Center attached particular importance to enriching the air business travel product family and released co-branded cards jointly with major airline companies such as Xiamen Airlines, China Eastern Airlines, China Southern Airlines and Juneyao Airlines. By the end of the third quarter of 2012, IB has issued 870,000 credit cards of air business travel series, of which the platinum cards account for 11%. Meanwhile, by establishing a quarterly tracking and analysis system for products, IB made detailed analysis over issued products, implemented classified management by way of promoting key products, maintaining development, improving development, and contracting to retreat from market, proposed suggestions on the improvement of product operation, and kept bettering business operation strategies, so as to further intensify differentiated business operation.
The basis of “structural adjustment” is to improve customer structure. In terms of promotion, IB implemented the assessment based on the first use to replace the assessment based on card issuance, guiding front-line marketing staff to issue cards pertinently with the assessment leverage. By the end of 2011, the customers of gold card and higher levels accounted for 51.3% of the total number of cards issued by the bank. In the whole industry, the market share of compulsory annual fees paid by the platinum cardholders which representing the high-end credit card customer groups hit 18.3%, ranking front in the sector of credit card.
The key of “structural adjustment” is to improve trading structure. In 2012, IB Credit Card Center launched card consumption promotions vigorously and mainly chose to make joint promotion with merchants, fully boosting the effective transactions; developed overseas characteristic products, helping to increase overseas transactions significantly; promoted the characteristic marketing strategies including installment and revolving interest to enhance the business profitability.
The guarantee of “structural adjustment” is to improve the asset structure. In 2012, the Credit Card Center of IB safeguarded the control over the risk of trading fraudulence and improved the processes at such links as authorization parameter, monitoring rule, risky short message, CPP card renewal, and off-line statement, both meeting the normal card consumption needs of customers and controlling and preventing the risks of losses due to trading fraudulence.
Data excavation, precision marketing
Credit card is an integral part to the retailing products. Due to its retailing features, there are usually millions of customers who initiate hundreds of millions of transactions. Data excavation based on the management of massive data is a new technology for processing commercial information. Boasting great application value in the credit card business of Chinese commercial banks, it plays an active role in advancing the precision marketing. On that basis, to try the precision marketing, since 2007 IB has begun to complete the data analysis platform, built various data models to excavate and analyze business data, and apply the results into various market promotions and marketing activities.
With years of development, now IB Credit Card Center has established a well-established BI data analysis platform system, including data analysis depository, bazaar and OLAP multidimensional statement system, and trained a professional data analysis team to guide the business practice, driving forward the implementation of precision marketing and active marketing. Let's take telephone marketing as an example. With the application of data excavation technology, the average success rate of telephone marketing for cash installment in 2011 increased to 26.10% from 16.5% at the beginning of the year, and the activeness and loyalty of customers were improved significantly.
Obtaining reasonable profits while bringing benefits to the stakeholders, and performing responsibilities in development
As the first Chinese “Equator bank”, in recent years, IB has extended the “green” development concept to the field of personal business, promoted “tailored intensive operation” in credit card business and registered profits. In the meantime, it has combined the performance of social responsibilities with business development. Let's take “IB China Low-carbon Credit Card” as an example. The bank has built the first personal purchase platform for carbon emission reduction with credit card in China, providing a convenient channel for individuals to participate in carbon emission reduction. While promoting green consumption to a great number of families, the credit card has also been attracting an increasing number of common people who love environmental protection to participate into the low-carbon campaign with its unique functions. By the June of 2012, more than 160,000 pieces of low-carbon credit cards has been issued, and the carbon emission reduction purchased voluntarily totaled 37,856 tons, equivalent to neutralizing the carbon emission by 272,000 people traveling 1,000 km by air.
In addition, the Credit Card Center of IB has also established a public benefit fund named “Low-carbon LOHAS Fund”. For each transaction made by a customer by swiping China Low-carbon Credit Card, RMB 0.01 would be denoted to the account of the fund. The fund would purchase carbon emission reduction on each April 22, the World Earth Day, in a centralized way, and in this way, each transaction made by cardholders will be contribute to emission reduction. This is another innovative measure that IB practiced social responsibilities after releasing the first low-carbon credit card in China. On April 22, 2011, the “Low-carbon LOHAS Fund” under the Credit Card Center of IB purchased 1,108 tons of voluntary carbon emission reduction; on April 22, 2012, it purchased 3,046 tons of voluntary carbon emission reduction, nearly three times as many as the figure in 2011. At the same time, the carbon-purchasing funds of IB China Low-carbon Credit Card customers have also lent vigorous support to many carbon emission-reducing projects such as Dongping 72MW Hydropower Station in Hunan, East Hengdai Mountain Wind Power Station of Huanan, Xiaping Waste Landfill Gas Collection and Utilization Project in Guangdong, Azhu 27MW Hydropower Station in Guizhou, and Wengyuan 20MW Hydropower Station.
With the instrument of credit card, IB has actively advocated green consumption, led the low-carbon life and witnessed both environmental and social benefits, winning recognitions by all works of life.
Moreover, after the strike of “5•12” Extreme Earthquake in Sichuan in 2008, IB immediately announced to release “China Heart Credit Card”, the first one on the theme of patriotism in China, and launched “China Heart Public Welfare Program” along with the card at the same time. When a customer successfully applied a China Heart Credit Card, the bank would donate RMB 1, and when he or she finished a transaction of consumption, installment or cash advance with the China Heart Credit Card, the bank would donate RMB 0.01. From 2009 to 2010, the “China Heart Public Welfare Program” of IB, with the help of China Foundation for Poverty Alleviation, built “sunshine playgrounds” for six poverty-stricken schools in Longlin County, Baise, Guangxi and Yixian County, Hebei, solving the problem of lacking sports facilities for local students. From 2011 to 2012, “China Heart Public Welfare Program” further extended its love, providing free packages to all students in the Primary School Attached to Changting Normal School (also known as Huangwu Primary School) and Dongpu Primary School of Datong Town in Changting County, Longyan, Fujian Province, solving the lacking of stationery for the students.
With the fast and healthy development of economy in China, the environment for credit card industry becomes increasingly well-established and the consumption concept of cardholders also becomes mature step by step. Hence, credit card business will witness the best period for overall development. With over 10 million pieces of credit cards issued, IB Credit Card Center will keep a development momentum of “making steady progress” by “tailoring to the needs of specific groups”, continue intensifying the innovation efforts, attach importance to the improvement of quality, and achieve its stable transformation and fast development against the backdrop of pushing forward the overall transformation of retailing business.