Affected by the tightening of macroeconomic and financial supervision, the profit growth of the banking industry has slowed down and interest margins have narrowed. The transformation to retail business and the creation of light banks and value banks have become the strategic choices of many banks. " "Those who win the retail market win the world" gained the industry's leading knowledge.

Among them, the credit card business has become an important breakthrough in the bank’s retail transformation. Recently, data from the "China Bank Card Industry Development Blue Book (2019)" (hereinafter referred to as the "Blue Book") released by the Banking Association showed that the transaction amount of credit cards in 2018 reached 38.2 trillion yuan, and its growth rate of 24.9% was the highest in the past five years. the highest level.

Industry insiders believe that as my country’s economy enters a stage of high-quality development and consumption upgrades advance, there is still huge market space for credit card business. Banks should fully tap market demand and use financial technology to provide customers with better services. experience.

The number of credit card issuances and transaction amounts has soared

Driven by the wave of consumption upgrades, consumer finance is becoming an important tool to support the needs of a better life. The credit card business is also in this context. Entering a period of rapid prosperity.

In 2018, the expansion of credit cards of commercial banks further accelerated, and the growth rates in transaction volume, card activity rate and per capita card holders were all at the highest level in five years. Blue Book data shows that the number of domestic bank cards issued in 2018 was 7.83 billion, an increase of 11.4% from the previous year. However, the number of credit cards issued was 970 million, a year-on-year growth of 22.8%. The credit card activity rate reached 73.2%, and the number of cards held per capita was 0.7. Both indicators are at historically high levels.

Wu Jian, director of the Bank Card Professional Committee and vice president of Everbright Bank, said that in 2018, the bank card industry continued to develop steadily, with overall risks stable and controllable, and the cumulative card issuance and transaction scale continued to grow; the acceptance environment continued to improve Optimization, overseas acceptance countries and regions continue to increase; payments are more active and convenient, and the support and stimulation of consumption are becoming increasingly active and comprehensive.

This trend is also reflected in the annual reports of listed banks. Data shows that China Merchants Bank's credit card transaction volume increased by 27.74% year-on-year in 2018, while Ping An Bank's increased significantly by 76.1%. As of the end of 2018, the number of China Merchants Bank credit cards in circulation was 84.3044 million, a year-on-year increase of 34.98%, and the number of circulation accounts was 58.0293 million, a year-on-year increase of 23.61%; Shanghai Pudong Development Bank had issued a total of 56.5054 million cards, a year-on-year increase of 37.26%, and the number of cards in circulation was 37.5036 million. cards, a year-on-year increase of 39.5%; Ping An Bank’s circulation card volume reached 51.52 million during the same period, a year-on-year increase of 34.4%.

It is worth noting that at present, the number of credit cards held per capita in my country is still low compared with developed countries. Statistics show that in 2007, the average American held 4 credit cards, and more than 14% of people held more than 10 cards. After the financial crisis, the number of credit cards per person in the United States continued to decline. By the end of 2016, the number of credit cards per person in the United States was still as high as 2.9 . In Japan and South Korea, which are relatively close to my country's consumption habits, the per capita credit card holdings are more than two. Some experts predict that with the emergence of Baihang Credit Information and other institutions, there is still much room for growth in the scale of credit card issuance and per capita holdings in my country.

The consumer finance market has huge potential

The massive increase in credit card issuance has brought about the growth of overdrafts and credit card loans. Blue Book data shows that as of the end of 2018, the outstanding balance of credit cards was 6.85 trillion yuan, a year-on-year increase of 23.2%.

Annual report data shows that as of the end of 2018, the balance of credit card loans of China Merchants Bank was 5,755 yuan, an increase of approximately 841 yuan or 17% year-on-year; the balance of such loans of Ping An Bank was 473.295 billion yuan, a significant increase of 55.9% year-on-year. . The credit card transaction volume of China CITIC Bank and Shanghai Pudong Development Bank in 2018 also reached 2.08 trillion yuan and 1.8 trillion yuan respectively, and the loan balance was 442.046 billion yuan and 433.329 billion yuan, a year-on-year increase of 32.63% and 3.65%.

Various banks are actively exploring the profit potential of credit cards. In addition to regular credit card loan business, they have also launched various installment products and deferred repayment products to solve users' short-term capital turnover problems. On the one hand, these products have consolidated the competitiveness of bank credit cards; on the other hand, they have also become an important means of increasing revenue for credit cards.

According to data released by UnionPay, the credit card installment income of UnionPay data customers accounted for 36.7% in 2018, surpassing interest income, which accounted for 30%, and became the largest source of income from the credit card business.

Xie Yonglin, chairman of Ping An Bank, has publicly stated that the bank’s three major businesses in retail finance are credit cards, consumer finance and auto finance. He believes that the growth of the core business of retail finance includes the growth of credit card loan balances, the growth of new E-generation balances, etc., especially credit cards.

Analysts believe that with the improvement of the credit reporting system and the continued growth of consumer demand, my country's consumer finance will usher in a period of development opportunities, and financial licensed institutions such as bank credit cards and consumer finance companies will undoubtedly become The main force in consumer finance.

Jin Shuying, full-time deputy director of the Bank Card Committee, said that my country’s consumer finance market has unleashed huge development potential, with increasing market standards, vigorous development of financial technology, and greater opening of the payment market, providing opportunities for the development of the bank card industry. This represents another golden 10-year period of important opportunities. In the future, firstly, we must strengthen compliance awareness, adhere to the bottom line of compliance operations, and strengthen industry self-discipline; secondly, we must adhere to the cultural concept of risk management, build an intelligent risk control system, and strictly control business operation risks; thirdly, we must focus on inclusiveness and service people’s livelihood and support the development of the real economy.

The core of retail business lies in user experience

With the rapid development and application of technologies such as the Internet, cloud computing, and biometric identification, customers' financial consumption habits and transaction habits are changing. For banks, establishing an intelligent and differentiated customer service model and continuously improving customer experience have become the core of the transformation and development of retail business.

Taking the credit card business as an example, "Traditional credit cards are only used as a single payment tool. In the past, we focused more on how to improve payment efficiency. In the era of the Internet, credit cards are not limited to It is a payment tool that connects multiple factors such as consumption scenarios, payments, goods and services, and becomes a consumption hub. " Jiang Yongjun, Vice President of Ping An Bank's Credit Card Center, believes that in the future, the development of credit cards based on technology will provide the ultimate in financial services. The experience is embedded in it, and one-stop solutions are customized around people's financial needs to become a one-to-one personal financial steward.

It has become a trend to optimize user experience with the help of "financial technology". Offline, on the one hand, banks have set up retail store-style physical outlets centered on customer experience, strengthened scenario-based design, continued to provide financial services to community residents during non-business hours, and organized a variety of community activities to increase customer stickiness; On the other hand, banks are also accelerating the intelligent upgrading of existing traditional business outlets. Various new smart devices such as intelligent investment advisory, self-service loans, and facial recognition withdrawals are emerging one after another to save users’ waiting time for doing business.

Online, many banks have launched Internet products such as APP, WeChat banking, and direct banking to meet users’ daily rigid needs such as transfers, consumption, financial management, loans, and settlements. At the same time, they use big data, Artificial intelligence, biometrics, blockchain and other technologies enhance the humanization of marketing.

"When developing retail business, banks must consider the combination of online and offline, especially the combination with scenarios. It is necessary to take advantage of the bank's existing offline advantages according to changes in customer behavior and habits, and combine online habits and create a better environment. The future trend is to provide retail customers with one-stop, all-round and fast services,” said industry experts.