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Data for today’s episode is provided by Mercator Advisory Group’s report – Credit Card Lenders: Hone Strategies and Do Not Let Fintechs Scare You.
Advice for Card Issuers battling back against Marketplace Lenders:
- Persistent customer education on the benefits of revolving lending vs. installment loans
- Don’t conform to the marketplace lending model
- Banks should be viewed as receptive lenders offering fair rates
- Adjust representation to consumers based on bank size:
-Large = National/Global partner
-Smaller = Regional/Local partner
- Harvest credit bureau data looking for attrition or opportunity
- Implement value-add attrition programs, as well as balance transfers and cash advances
Marketplace lenders and non-bank point-of-sale finance lenders are not likely to disrupt the course of credit card lending.
Marketplace lenders now dominate the installment loan industry, a segment previously dominated by banks. Loan options are appearing everywhere, but fintechs are simply repackaging old lending products for loans and point-of-sale finance. Credit card issuers should focus on their products’ benefits rather allowing these aspiring disrupters to change the playing field.