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Resolving NTB Credit Card Issuance Challenges

Oct 19, 2022

If you are in the credit card issuance business, then this is an article you must read.

Credit cards have been a growing industry in India, with 7.36 crore card users. The issuance side is leaping at 19%, and card spending is growing at 48% YoY.

3 primary levers that drive credit card growth are as follows.

  • Current Account Savings Account (CASA) base for Existing to Bank (ETB) issuances
  • Co-branded card partnerships
  • New to Bank (NTB) issuances through sourcing partners

Challenges in NTB card issuance

Though the market is moving towards instant credit card issuance, it still takes 3-5 days to provide hard approvals, complete KYC, and disbursal of cards. Instant origination is only possible when the assessment/decision becomes instant across touchpoints like branches, websites, apps, and partners. While this can be possible for issuing credit cards to ETB customers, the real challenge lies in issuing cards to NTB customers. Current origination systems are inadequate to meet the market’s needs.

Credit cards require a unique origination system built for instant underwriting, on-the-fly policy changes, central catalog management, and managing partnerships from a central point. This system will address the challenges in issuing cards to NTB customers – Instant Underwriting, Instant KYC, and Instant Issuance.

What if there is a platform that accelerates instant card issuance?

M2P’s Surrogate Platform is the fastest way for banks to issue credit cards to NTB customers by assessing the first-party data, such as the customer’s payroll, existing credit cards (if any), and average quarterly balance through the Account Aggregator framework.

How does the platform work? (In case of a payroll-based surrogate)

  1. The customer enters their personal information on the bank website, and basic bureau checks are done.
  2. They provide consent to retrieve payroll from HRMS.
  3. The platform verifies employment, income, and personal information.
  4. The credit limit and eligible cards approved for the customers are displayed on the website.
  5. The customer is verified for CKYC, after which the virtual credit card is issued instantly.

And all of this happens within 3 minutes.

Through this surrogate program, payrolls of over 1.5 crore salaried individuals from Tier-A and Tier-B companies can be sourced easily for card issuance. Beyond payroll, surrogates like the Card-for-Card and AQB are some of the commonly used surrogates.

  • Card for Card (C4C) –The C4C surrogate helps banks issue new credit cards based on the customer’s existing credit card. The customer’s card statement is used for assessing their creditworthiness. What’s new with this program is that banks can run customized policies for credit user segments like revolvers, transactors, etc.
  • Average Quarterly Balance (AQB)– This model reduces friction for uploading documents with the help of the Account Aggregator model to get the AQB information like the nature of the accounts owned, credit & debit transactions in the account, investments made by customers, insurance premium payments, etc. And instantly issue cards based on this information.

Depending on the bank policies, more than 20 surrogate programs can be used for issuing cards.

The surrogate programs listed above can be suitable for issuing credit cards for all types of customer profiles as follows.

  • New to Bank (NTB) – Customers with no previous relationship with the bank. These customers can be instantly issued a credit card based on their payroll.
  • Existing to Bank (ETB) – Customers who hold an account of any nature with the bank. 
  • New to Credit (NTC)Customers with no credit product.
  • Existing to Credit (ETC) Customers who have availed of any credit product like loans, overdrafts, etc.
  • New to Credit Card (NTCC)Customers who have loans or any credit product but do not have credit cards.
  • Existing to Credit Card (ETCC)Customers who already have credit card(s). The C4C surrogate program will help issuers expand this customer base.

6 reasons why you need a Surrogate Program

Surrogate platforms enable card issuers to expedite credit decisions, increase their customer base and enhance seamless onboarding. By enrolling with the surrogate platform, card issuance not only becomes simple and trustworthy but also super quick (within seconds).

Here are 6 key reasons why issuers must leverage M2P’s surrogate platform.

  • Instant card issuance

Issue a virtual card in minutes and enable customers to initiate an online transaction right after card issuance.

  • No code BRE

Customize the Business Rule Engine (BRE) catering specifically to the target customers, thus resulting in a win-win situation.

  • Funnel transparency

Easy single-point visibility across all touchpoints.

  • Retargeting campaigns

Rejected customers can be retargeted via campaign teams.

  • Single window for onboarding marketplace partners

Completely manage your sourcing partners with the help of this platform so that banks don’t have to spend bandwidth for API integrations with partners.

  • User experience

Provide a seamless experience that requires minimal or no effort on the end customer’s part.

Leading banks in selected locations have started adopting our surrogate platform. Do you also want to transform your credit card issuance game?

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