Synopsis
The report provides insights into reward credit cards
offered to customers in key markets:
• It provides a global snapshot of current market dynamics
for reward credit cards and their future outlook.
• It provides insights into the key factors driving
increased focus on rewards and loyalty programs.
• It provides insights into best practices and key
strategies adopted by card issuers in key card markets.
• It provides information on value-added features offered by
different types of credit card to attract customers.
• It provides case examples which highlight the successful
implementation of best practices and strategies in key markets.
Summary
Banks are increasingly using rewards and loyalty programs as
a tool for maintaining relationships with top-end customers, as these
relationships provide high potential for revenue generation. Financial
institutions are putting forward premium experiences and offers to increase
loyalty and develop deeper banking relationships. Rightly positioned, unique
rewards act as a key differentiator in a highly commoditized financial services
market.
To remain profitable, banks have been making changes to
their strategies and operational models which includes finding the optimum mix
of funding options and reward offerings to achieve greater levels of customer
loyalty and profitability. Both issuers and card schemes are partnering with
airlines, hotels and popular brands to offer merchant-funded rewards. The
strategy allows card issuers to improve the value of their reward credit cards
without putting upward pressure on costs.
Consumers are traveling more than ever, and forecasts for
outbound trips indicate that this trend will continue over the next five years
in key economies. Consequently, card issuers and schemes offer credit cards
that focus on travel benefits to increase customer retention and attract new
customers. Travel credit card customers are often offered lounge access at
airports, free or heavily discounted air tickets, preferential treatment at
hotels and resorts, free valet parking, discounted limousine services, and
insurance cover that ranges from travel accident to lost and delayed baggage,
to trip cancellation.
There is increased investment in customer engagement
strategies. Schemes and issuers are offering personal concierge services on
their top-end credit cards, or access to exclusive events to differentiate
their products. Issuers are also expanding their presence on social media and
mobile platforms through various apps to drive brand loyalty. The increasing
popularity of social media and smartphones also allows card issuers
opportunities to enhance their marketing efforts while keeping costs low. In
addition, customer check-ins at various locations using smartphones has opened
up opportunities for a more targeted marketing effort that saves issuers
resources, while providing more relevant deals and offers to customers.
Scope
• This report covers the market size of credit cards in six
key markets.
• This report provides a comparative analysis of benefits
and services offered by over 80 reward credit cards in key markets.
• It covers key business drivers for card issuers to issue
reward credit cards for various customer segments.
• It covers key strategies adopted by card issuers for the
six countries covered in the report.
• It also provides case studies based on best practices
adopted by the card issuers in these countries.
Reasons To Buy
• Gain insights into market potential for reward credit
cards in six key markets.
• Gain insights into the product strategies of card issuers
in key markets.
• Gain insights into current and future sector dynamics for
reward credit cards.
• Understand emerging trends and drivers to streamline
product offerings.
Key Highlights
• Consumers are moving away from conspicuous consumption to
more considered consumption, and access to special or unique experiences
through their card has gained importance. In this altered environment, banks
and other card issuers are adopting various strategies to decrease operating
costs and increase revenue potential.
• Banks and other card issuers are increasingly focusing on
credit cards designed to target mass affluent consumers driven by the
relatively high profitability offered by this segment. At times, banks may run
the cards at a loss, but benefit from the rest of their relationships with
clients through deposits, investments, savings, mortgages, and asset and wealth
management, among others.
• Card issuers have increased their focus on issuing credit
cards with travel benefits. Many issuers across the world, including Bank of
America, Chase, Citibank, HSBC, Commonwealth Bank, Lloyds, Capital One, Hyundai
Cards, Samsung Cards and Amex, among others, issue premium cards which
specifically focus on travel-related services.
• Banks and other card issuers are expanding their operations
on social networks through partnerships with merchants such as retailers,
restaurants, leisure centers and travel operators. The partnerships provide
opportunities to engage customers through additional content, offers and
discounts. These expansionary moves are driven by a desire to improve consumer
offerings and increase revenues.
• Bank-funded reward and loyalty programs have increased
cost burdens for issuers. Banks and card issuers have introduced similar
loyalty programs which have become almost indistinguishable. This has compelled
banks to carry out other expensive promotional initiatives to set themselves
apart. Consequently, issuers are moving towards merchant-funded loyalty
programs to lower their operating costs.
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