No credit should be given...

...to credit cards. 

An area of financial services that seems to have largely missed the opportunities presented by digital and the experience economy. Instead opting for token gimmicks and sales ploys in a desperate attempt to compete. This presents a massive opportunity for disruption.

To be fair, as a product category credit cards have had a lot thrown at them. Aggregators, rate lead advertising and general market entrant pressure has lead to providers having to focus on rates, sales promotions and the increasingly emergent “loyalty” category in an attempt to differentiate. The latter being a prime example of missing the experience economy opportunities anyway, with loyalty schemes offering further fragmentation, overly complex attempts to gamify the reward systems and generally confusing approaches to what seems so simple. 

This relentless pressure to hook consumers in an increasingly competitive landscape, combined with crude counter pressure from regulation has created what can only be described as a hotch-potch and unconnected series of experiences with little evidence of omni-anything.

What does the typical experience look like from a prospect POV? Well I don’t think there is one, and I think that this often gets missed in FS more widely, but here’s a linear view of how it could pan out:

• Financial assessment
• Research
• Comparison
• Selection
• 1st stage application & Initial approval (usually based on volunteered information, some providers now opting for no risk credit checking etc.)
• 2nd stage authentication (via post 5 working days) asking for originals or authenticated copies for things like P60s and Payslips (all of which are now mostly digital), this may take another 5-10 days for approvals
• 3rd stage acceptance and actual offer made (not necessarily what you applied for) or rejection
• 4th stage issuance and your customer acceptance / activation

 It’s a long journey - let’s throw in some typical added frustrations:

• If you have an existing relationship with the financial services company it will probably be like you don’t exist. Logged in and fully authenticated you might even be recognised in the credit card offer ad, but come the application process you’ll need to start again.
• Electronic authentication isn’t often permitted so it’s down to original paper copies (that no longer exist). P60’s and payslips have long been made electronic and they aren’t typically easy to recover - this can take days. Sending originals of passports and driving licences has always been impractical and inconvenient, and getting authenticated copies isn’t exactly easy either!
• You won’t know where you are in the process. You send your information in as an initial applicant typically to be told it’s all great - then nothing. You won’t know that it’s being processed, that a letter has been issued. By day three you’ll be nervous or calling to get your status. At this point most have been “offlined”, it’s a bit like being “sent to Coventry”. Your relationship is now about you sitting in a vacuum chasing the provider for any signs of progress.
• Deal, forget the deal this is what we can offer you! This one gets me slightly annoyed. And the skeptic in me could easily conclude that once they have got you a long way down the horrific process offering something sub-optimal will probably still work. After all you’re exhausted by this stage.

Apart from obvious changes across this initial step in the experience there are many more to consider post getting your credit card. How easy is it to manage? Will the ever so simple loyalty programme actually be simple to understand, rewarding and meaningful? Will your credit and non-credit financial life seamlessly integrate? There are examples of bits of this working, but none in combination and none to a particularly satisfactory level. Especially the latter, credit life is all so often a separate thing, on its own trajectory with little accountability for how it’s used - that’s down to you.

A few years back I completed a study of credit card experiences for a client. We went right back to the beginning of the process. The stage where for various reasons the prospect was assessing their finances. This can range from “how am I going to pay for food shopping this month” through to more complicated decisions, like, “are their other options to help me through this house purchase” at these stages very few providers are present, and in all cases these people have bank relationships, and pretty obvious signs in the financials that some help might be needed. This was a clear source of frustration to them - “why don’t they just call and tell me what my options could be?”. Now there are a number of barriers to doing this, but there are plenty of ways around them as well, and it’s a clear opportunity to think about the relationship you want with customers and digitise this as opposed to having a merely transactional based relationship with ads on top. It’s important to remember that this is about having a helpful and useful product, but also that Credit Cards can be loved - there I’ve said it! There’s no reason why they shouldn’t be. They are an important part of financial life for so many, and if they aren’t then why are they permitted in the first place. This has to be the mentality and approach taken, there’s so much to go at here.

All in, there’s a huge potential to reimagine credit cards. How they integrate into people’s lives, and deliver on their promises of offering flexibility, a useful credit option, being part of your financial life and importantly an omni, ecosystem integrated and seamless relationship. It’s a chance to differentiate and compete better and maybe even create sustainable relationships over much longer periods of time. 

 For now lets just keep it simple:

1. Create a vision / value proposition of what your card means to the customer - insight driven, hyper-relevant to their lives and how they spend, manage and deal with their financial life.
2. Design your experience strategy to deliver this vision, and remove all speed bumps and blocks along the way, looking to maximise the moments that matter and being genuinely useful, inspiring and differentiated as a result.
3. Sell the customers more product, especially if you’re a bank provider. It’s an entry product for some customers, but as the only experience it’s hard to engender loyalty and it’s more likely that the “cost of credit” will become a leading consideration factor.