. Interpretation of new credit card regulations
Since the first year of credit card in 2003, the domestic credit card market has experienced rapid development in nearly 20 years. The overall operation of the People's Bank of China's payment system shows that as of the end of the first quarter of this year, 800 million credit cards have been issued nationwide, with a total credit amount of 21 trillion yuan, an average card quota of 27,000 yuan, and a credit balance of 8.5 trillion yuan, of which the balance of overdue for 6 months accounts for 1.09%. Faced with such a huge market, the People's Bank of China and the China Banking and Insurance Regulatory Commission issued the "Notice on Further Promoting the Standardized and Healthy Development of Credit Card Business" (hereinafter referred to as the "New Regulations"), which clarified specific requirements for credit card issuance, credit granting, installment, external cooperation, and consumer rights protection of , strengthen compliance operations, and promote commercial banks to further strengthen risk management, transform extensive business development models, and turn to a high-quality development path of refined and standardized management.
. From the perspective of customer operations, the new regulations should . For new customers, it is clear that the total number of cards approved through cooperation channels shall not exceed 25%, and the credit limit shall not exceed 15%. At the same time, it is emphasized that the entire process of customer acquisition from application acceptance to card issuance and approval is required to be qualified and hold a certificate to work; it is clear that marketing methods such as default checking and forced bundling are not allowed to be adopted.
1-2 For existing customers, strengthen the requirements for dynamic monitoring and management of sleep credit cards, set the control requirement of sleep card accounting for 20%, and restrict the issuance of new cards for banks that do not meet the standards.
1-3 In performance assessment, it is clear that the number of card issuances and customer increments cannot be used as the main assessment indicators, and compliant operations and risk management must also be included in the assessment system.
2. From the perspective of risk management, the new regulations must
2-1. The credit approval process must be verified in multiple dimensions of customer identity and application information; set a credit limit for a single customer, and at the same time, when credit approval and adjustment of credit limit, the accumulated credit limit of the customer has obtained in other banks must be deducted.
2-2 In the customer management stage, dynamic quota management is required, and it is clear that the re-evaluation of the customer's quota is carried out at least once a year, and the quota is adjusted with the customer's consent.
2-3 In terms of installment business management, it is clear that installments need to be approved separately, emphasizing that the balance of installments cannot be installed, and the minimum repayment amount is not enjoyed in installments, and the installments are transferred to their account and included in advance cash management.
2-4 Card security: once again emphasizes monitoring of credit card transactions, including monitoring of the use of credit card funds, as well as monitoring of cardholder behavior patterns, to prevent cash out and anti-telecom fraud.
2-5 Collection management: emphasizes comprehensive, timely and accurate grasp of asset quality. At the same time, it emphasizes the construction of commercial banks' own collection capacity and reduces their dependence on outsourcing institutions.
2-6 Risk Quantitative Management: Emphasize the establishment and improvement of a full-process management mechanism for the development, testing, review, application, monitoring, correction, optimization and exit of the credit card risk model, and the risk model management responsibilities shall not be outsourcing.
3. In response to the above requirements, commercial banks can think about coping measures from the following directions
3-1 In terms of new customer acquisition, it is necessary to reduce their dependence on external customer acquisition channels. On the basis of comprehensively evaluating the benefits, costs and risk levels of the target customers, formulate and adjust the screening strategies of the target customers, and configure sales channels accordingly, optimize and adjust the sales process to accurately reach the target customers, and efficiently realize customer conversion through compliant operation processes.
3-2 For existing customers, the way to expand the denominator to lower the proportion of sleep cards through new issuance is no longer applicable, and banks need to work hard on card activation. By establishing a multi-dimensional monitoring system covering customer card/account status and transaction conditions, timely identify sleeping users and potential sleep tendencies, design targeted product rights and promotional activities, and improve activity rates.
3-3 In terms of risk management, for the entire customer life cycle of credit cards, from customer acquisition, activation, card use/customer value improvement, retention to loss, , it is necessary to deeply explore customer behavior preferences, business characteristics, risk characteristics and key process links in each stage of the customer journey, establish and improve risk quantitative management of each risk management link of credit approval, credit limit and installment management, card transaction monitoring, and collection, carry out continuous evaluation and monitoring of the effectiveness of risk models and risk strategies, and continuously seek the best balance of risks and returns of credit card business.
3-4 In terms of assessment, a comprehensive assessment system covering business growth, risks and benefits, compliance, customer complaints and consumer insurance is established.
2. Challenges faced by credit card centers
With the changes in the age structure of credit card customer groups, changes in customer payment methods and behavior patterns brought about by the development of the Internet, and the application of new technologies, credit card centers have encountered new challenges in business development. Establishing a comprehensive customer value assessment system covering the entire life cycle of customers, reshaping the product service system with customer value as the center, and cultivating core business capabilities is an urgent strategic transformation direction. It is also a solution to meet the requirements of this new regulations and take a long-term basis.
At this stage, credit card centers generally face problems such as market/sales, customer operations, risk management, and business operations, the overall resource and information of the card center, poor cross-functional collaboration efficiency, and inability to actively identify risks. It is urgent to realize the digitalization of business operations and management, and to comprehensively evaluate the five elements of "risk, efficiency, service, cost, and value", use data decisions to drive business development, change product service models, realize cost savings and capacity release, comprehensively improve efficiency, quality, risk control and service levels, and truly create differentiated competitive advantages with customer value management as the core.
3, KPMG solution
In KPMG's eyes, smart chain enterprises rely on digital technology to empower the front, middle and backend, link the business ecosystem, and build a new digital organization with "customer-centered, commercial value output-oriented" through the deep integration of culture, management, business, data and technology.
Smart chain enterprises are the direction of credit card strategic transformation, that is, transformation and development into a comprehensive combination of digital, integrated, ecological, scenario-based, innovative and intelligent operations. Organically integrate new ideas such as platform strategy, ecological system, technology-enabled business, scenario integration and interoperability, and customer experience as the king principle into the business system, and reshape lasting profitability through comprehensive and systematic changes.
KPMG provides the credit card center with a solution to build a digital intelligent full-process operation management analysis platform. The goal is to achieve operational risk identification, monitoring, early warning, and analysis, and continuously optimize operational risk control rules and strategies, and combine business characteristics to achieve an effective balance between operational control and operational energy efficiency.
KPMG combined with project experience to summarize the platform construction process into the following five stages
First, goal setting
Through interviews and exchanges, we clarify the vision and construction goals of the construction of the digital intelligent operation management and analysis platform of the card center.
Second, Business evaluation and sorting
sorts out and integrates the operational processes in each scenario of the credit card customer's card journey and the internal business management functions of the card center, helping the card center identify key scenarios and processes that need to be included in digital intelligent business monitoring;
Third, Data collection and analysis
collects data for key business scenarios and processes that need to be controlled and monitored, refines the business operation processes related to business activities, identify key connection points and key data, and creates a panoramic view of business-financial linkage from a unified perspective of business finance; establishes a full-process monitoring view of typical business links, sorts out the key monitoring indicators corresponding to the monitoring scenario, and establishes a business monitoring and analysis indicator system.
Figure 1: Build a business monitoring indicator system
Fourth, Rules and Strategy Design
Establish business operation risk control rules based on scenarios and processes based on business evaluation and sorting; carry out data cleaning and analysis, design relevant processes series control strategies and operation risk monitoring rules, and continuously optimize control strategies and risk monitoring rules based on early warning sample data, thereby building a platform-based closed-loop optimization model based on intelligent data operation management of the entire process.
Figure 2: Platform-based closed-loop optimization model
Fifth, platform integration and optimization
integrates data collection, data analysis, business rule management, business process management (process design and connection), and builds an integrated full-process penetration digital operation monitoring and analysis platform, and implements continuous optimization of the platform according to business needs and the automation of machine learning and artificial intelligence .
Figure 3: Digital operation monitoring platform that penetrates the entire process
4. KPMG service case
A national joint-stock commercial bank credit card center Digital technology empowers the transformation project of the excellent business system.
. Challenges faced by customers
This customer hopes to improve the existing business monitoring system from a large operational perspective, prevent various business operation risks of the card center, improve operation quality, and achieve the transformation and development of "comprehensive operation excellence". Specific requirements include:
1) Solve the problem of process connection and data docking across business domains and functional domains, reduce risks and improve efficiency;
2) Visualize, intuitively and concretize the key data of the internal operation indicator system, and reflect the operating status in real time;
3) Drive business rules and control strategy design through data analysis to achieve the best balance between risk control and business energy efficiency.
2, solution provided by KPMG
1) Create end-to-end full-domain full-process penetration analysis capabilities: Focusing on the business goals of high-quality and sustainable development, the indicator system, process efficiency, risk prevention and control, employee behavior and other business elements in business management and governance work are penetrated and analyzed from the perspective of the card center's operation.
2) Release the dividends of digital technology empowering operations: gather all-domain data, establish penetration monitoring and analysis of assets around all-domain data, and strengthen risk control and improve collaborative efficiency through data-driven intelligent automation means.
3) Improve the closed-loop management system for continuous optimization of business monitoring: Based on expert experience, various models are introduced for monitoring and analysis, and continuously monitor the performance of the model for expert guidance and optimization. At the same time, the ability of card center closed-loop management is continuously improved through technological means such as machine learning and process mining.
3, customer's business income
Through planning consulting services, this project assists customers in integrating and penetrate business flows, operation flows, and capital flows, establishing a closed-loop and long-term operation monitoring mechanism and operation monitoring and analysis indicator system to achieve pre-prevention, in-process control, and post-process analysis, and achieve the goals of reducing costs, improving efficiency, and controlling risks. The digital operation management monitoring and analysis platform is launched in the first phase covering 16 theme domains, supporting more than 100 important operation indicators and monitoring and early warning models. Through automated data indicator monitoring, the risk control capabilities of the card center are improved, and at the same time empowering operational efficiency and customer service capabilities, the application effect after production is significant. Subsequent applications have been expanded to business monitoring in multiple departments such as marketing and compliance, becoming an organization-level business monitoring center.
【The main author of this article 】
Zhu Jingyu Director of consulting services of KPMG China Financial Industry Technology Technology Technology Co., Ltd.
