Timetric and Datacard Group conducted a roundtable discussion in Philippinnes that outlined the increased acceptance of instant card issuance and the opportunities it brings. The concept was argued in the rising card market, as a way of enhancing the front-end service of the bank in bringing speed and convenience to the customer. BPA’s Sruti Rao reports on key insights from the discussion
Customer centricity has evidently become the principal focus for banks, and addressing the constantly changing and demanding needs of the customer has become imperative for banks to maintain their share of wallet.
As Monica Lim, director of Instant Issuance, Asia Pacific for Datacard Group highlighted, loyalty does not play as big a part in consumer choice anymore. Retail clients are now prioritizing innovation over loyalty, hence it is even more important for banks to renovate their service offering to offer efficient service that personalizes the relationship with the customer.
Instant card issuance, which denotes ready-to-use payment products issued on demand inbranch locations is popularizing with banking institutions as a means of enhancing customer relationships with faster and personalised card services.
"In the last 5 years, we saw a need for banks wanting to reach out to customers. Today banking customers transact in many ways from online, mobile to ATM. Customers want to now have different options to interact with the bank in any way that is convenient and interesting to them. In addition, customers want the bank to be relatable to their lifestyle needs and preferences. A new way to reach out to customers is key if the banks are tasked to increase their revenue and improve customer satisfaction."
CardWizard, the central software that facilitates the implementation of instant issuance, has been in existence for the past 16 years under US-based Dynamic Card Solutions. Datacard bought the company 4 years ago with the aim of deploying this service for all customers worldwide.
Instant issuance has already become a standard in the US, with top global banks such as JP Morgan marrying the service to their prepaid card offering ‘Chase Liquid’ general purpose reloadable prepaid cards. This program has been deployed with more than 2500 printers in the field and the bank has rollout plans of the same for their credit card offering by 2014.
Migrating this service across all types of cards is a seamless process and already transcend through to EMV chip card printing with multiple card vendors and payment schemes, including national standards.
Potential in Philippinnes
Douglas Blakey, group editor of consumer finance at Timetric reinforced that practicality and convenience holds precedence for the consumer. "Globally, 36% of customers have changed their main bank in the past, and 7% of customers are planning to leave their bank".
"Never before has loyalty management and personal customer, and attention been such an issue for the sector".
Philippinnes as a market also showed great promise in potential growth in the cards market. According to research by Timetric’s Cards and Payments Intelligence Center, the cards market in the emerging market is expected to grow from $58.1m in 2013 to $72.9m in 2017. Within this four-year period, prepaid cards are expected to boast an annual growth rate of 15% to reach $20m in market size by 2017. Debit and credit cards will have a more modest annual growth of 4% and 3% respectively.
Benefits of instant issuance
The Datacard Group representative highlighted that empowering customers with immediate purchasing power through instant deployment of their credit or debit cards on-demand has a positive impact on the bank’s credibility and perception of customer service. The personalisation element of modifying the product to reflect the unique personality and preferences of the customer also leaves a lasting impression.
Furthermore in term of transaction activity, the promptness of card deployment has increased card usage and brought a 28% increase in activation rate according to the firm’s research. JP Morgan Chase in the United States for instance, expressed that the ability for their customers to immediately activate their debit card in effect brought about a rise in card activity.
In a day and age where a predominant amount of the bank’s interaction with the customer is through an online or mobile medium, maintaining a face-to-face interaction with them has become a challenge. In an exclusive conversation with BPA Monica Lim explained that instant printing of the respective banking card would compel individuals to visit a convenient branch with the service and will allow for more interaction with front-end staff. The customer may order for the card and ask for personal preferences online, but will have to physically collect it at the branch, which is advantageous for the bank and even brings opportunity of cross-selling other products.
From an operational standpoint, postage, paper and mailing costs are in effect reduced through instant issuance at the branch and also allows the bank to better monitor whether the card has reached the respective customer or not. Lim had quoted during her conversation with BPA, the example of Arab National Bank, one of their existing customers, adopting the instant issuance program to avoid their customers’ cards getting lost in the mail. This thereby further reduces the emergency card replacement cost with better assurance of card delivery.
Smaller banks see a strong opportunity in adopting instant issuance, highlighted Monica Lim, as their limited branch network and IT outsourcing trend would not translate to a disadvantage in remaining competitive with their service.
"We are seeing a trend of more and more acceptance. Banks like RHB, ICBC, leading banks in each market are moving into implementing this, while smaller banks don’t want to be left behind."
Datacard provides instant issuance for major card programs including Visa, Mastercard and American Express credit and debit products. The 7,500 installations worldwide of their CardWizard personalization solution shows the growing popularity of this concept. Integrated with more than 30 card management systems and fully PCI PA-DSS compliant, the systems allows for any form factor of cards to be integrated from embossed and flat cards, retail cards and even contact and contactless smart cards.
Instant issuance doesn’t affect the traditional model, reassures Monica Lim. Established security centres Visa and Mastercard will maintain their risk and security measures and internal screening and checks of the bank remain unchanged.
"Banks holding customers data store data in a secure location, which goes back to the data centre. So when they release that information to the branch for personalisation, the CardWizard software will work with the bank’s centralised system to send the encrypted data to the branch. The data is sent from the data centre directly to the printer.
"Authentication of the customer is still up to the bank". In the current landscape, when the customer authentication is done in real-time, this enables the instant issuance or replacement of the card without jeopardizing security.
There is also no need to worry about cards getting lost in the mail. Keeping it in-house allows for better control on issuance management. Customers can also select their own PIN number at the point of card issuance for better customization and security.
Considerations in implementation
Though the business model of card issuance is not affected with the adoption of this concept, there still remain processes in integrating the CardWizard software and supporting technology into the core system of the client bank. Hence the cost of hardware, staff training, and integration of instantly-issued cards with the central card management system have to be considered.
Lim clarified that the time frame for each implementation phase depends on the scope and complexity of the issuance program, with simplistic cards such as magnetic stripe debit or ATM cards needing a shorter rollout cycle than chip-based or smart cards.
Lim added that banking clients can choose to work with Datacard in a pilot model, and test-case their program in a controlled environment of 5-10 branches, before rolling out to a bank-wide implementation.
The thought leadership executive briefing highlighted the key features and benefits of instant card issuance, as a means of engaging the customer with secure and prompt service. The discussion was apt in the Philippines where the cards space has evidently shown promise as a key market for the region.
The popularity and success of the concept in the US holds truth to the idea that it’s only a matter of time before instant issuance establishes itself in Asia. Datacard Group already sees promise in this, with existing clients in the region to include RHB Bank, China Everbright Bank, and Tianjin Social Security. The concept of instant issuance is simple, but the impact it has on service proposition of the business, effectively makes it a differentiator in enabling more sophisticated service in an increasingly competitive landscape.
About the company:
Datacard Group is a privately held company headquartered in the US that traditionally brought personalisation equipment and services to card issuers. After the acquisition of Dynamic Card Solutions in 2009 Datacard acquired the CardWizard software that facilitated the instant card issuance platform to be available globally.
The CardWizard, Secura and Syntera software used for the printer systems deliver secure planning, implementation and support systems in the instant card issuance facilitation process.
Datacard Group made secure, high-volume issuance of credit cards possible more than 40 years ago with the first high-speed card personalization system. Today, the company continues to develop patented technologies that help customers improve productivity, profitability and cardholder satisfaction.
Services include high volume and instant card issuance, secure credential issuance and management, passport production, delivery fulfilment and packaging. Building on a 40-year heritage of customer success, and as an industry leader in secure ID and card personalization, Datacard solutions are used to personalize and deliver more than 10 million cards and 7 million smart cards, including more than 90% of the world’s payment cards.