by Key Performance Indicators, popularly known as KPIs, are very important in the evaluation of business performance on different levels. They basically represent a set of measures that focus on important aspects of business performance for the overall success of the business. KPIs in the credit world are invaluable for the following reasons:
- They help a business to stay focused on productivity.
- They give you an insight into the overall health of your portfolio.
- Through the generated data, you can get easy and actionable insights that will drive your business to profitability.
There is so much risk-taking in a credit card business. Since companies are always at risk of losing a high amount of money, they have to constantly evaluate just how safe the business is. They also need to evaluate the information protection measures in order to improve their system stability and the security of the business. For every financial institution, it is important to always evaluate its credit risk from the expected revenue and the expected loss. Every part of credit card processing needs to be gauged to track down how each operation has been occurring after a certain period of time.
Performance of Debit Cards
Building Customer Loyalty
A growing body of research shows that highly active debit cards drive overall customer engagement, strengthening a bank’s relationship with its customers and increasing their loyalty.
Optimizing debit portfolios and driving debit card usage can pay dividends beyond the value of additional transactions. A highly engaged current-account consumer can generate substantially more revenue for a bank by remaining more loyal and adopting multiple banking products.
Highly-engaged debit consumers are also big e-commerce shoppers, using both debit and credit cards, and they’re more prone to want the latest technologies. According to Digital Transactions, a recent survey by Auriemma Consulting Group found that the use of debit cards is increasing for online and big-ticket purchases, a sign of rising consumer trust in e-commerce and confidence in personal finances.
Cross-Sell Opportunities
At the same time, debit can boost cross-sell opportunities for banks. The more a customer uses a debit card, the stronger their relationship is with the bank, and the greater the chance that they will expand the relationship to additional products and act as a brand advocate. As a result, banks can more easily migrate customers from initial checking and savings accounts to credit, loans, investments and new technologies like contactless and digital wallets. For example, if a highly-engaged debit customer decides to buy a home, the bank holding the debit account is more likely to be top of mind when shopping for a mortgage.
