Issuers Focus on Data-Driven Personalization to Boost Cardholder Confidence
NEW YORK – September 23, 2024 – Credit card issuers are increasingly prioritizing continuous monitoring of cardholder behavior and leveraging real-time data to deliver personalized experiences, aiming to close the “credit confidence gap” and foster long-term relationships, according to industry leaders speaking with PYMNTS.The shift focuses on moving beyond initial card acquisition to ongoing assessment and product “graduation” tailored to individual financial journeys.
David Durov, SVP of conversion at i2c, emphasized the importance of sustained measurement. ”What we don’t always do a great job of is continuing to measure, and continuing to watch for the signals over the life of a relationship.That really is the nonnegotiable part here,” he stated.He advocates for “data-driven triggers” and platform-integrated behavioral tools to enable immediate, targeted interaction.
The need for proactive portfolio reviews was highlighted by Clearview’s representatives, who noted that a card suitable for a customer ten years prior may no longer meet their needs. They’ve implemented portfolio reviews and line increases to demonstrate responsiveness to evolving financial situations.
Varo Bank employs a dual underwriting strategy, relying on cash flow analysis for 95% of its decisions, supplemented by traditional bureau data for the remaining 5%. this approach facilitates entry through credit-building products and unsecured loans, fostering cross-portfolio growth.
Durov envisions a future of “a segment of one,” where issuers utilize data and behavioral signals to understand each customer’s lifecycle stage and present relevant offers. Varo already leverages cash flow analysis for timely installment offers,while Clearview is exploring predictive outreach.
Issuers are also focused on agility in product advancement. Durov noted that while not all institutions can launch new products weekly, platforms like i2c’s enable rapid customization and testing of new features. He described i2c’s platform as “a very customer-centric platform, not a product-centric platform.”
Looking beyond traditional unsecured credit, durov pointed to opportunities in buy now, pay later (BNPL) and the potential of artificial intelligence to deliver ”customized experiences and treatments” through hyper-segmentation at the household and customer level.
