Credit Card Journey

According to the Brazilian Central Bank, in June 2022, the number of active credit cards in Brazil was almost 2 times the economically active population, in other words, 190,0 million credit cards for 107,4 active people. This figure shows how accessible and supposedly competitive this market has become over the last few years. 

Despite current macroeconomic factors, such as higher interest rates and population indebtedness, credit cards are one of the most relevant means for financial inclusion and consumption. It also represents an important piece of banks’ (and non-bank issuers) credit portfolio, revenues, and profitability.  

While the competition contributed to democratizing access to credit cards, it is making players auto reflect on their capacity to differentiate and stand out in the field. It is expected that differentiation will drive preference, usage, and loyalty by consumers.   

But how can banks truly differentiate and win?



Going back to the basics, issuers (banks and non-banks) expect to increase their financial results by augmenting activation rates and spending per card, reducing the cost of acquisition and post- sales costs, while reducing churn and losses. With credit cards, players also aim to improve their customers’ lifetime value, paving the way for additional banking products and services.  

We selected four key success pillars of differentiation in credit cards for banks and non-bank issuers: 

1. Customer experience (must have) delivery of the best journey, from the onboarding to the credit card statement reading. The customer must be delighted in their interactions. 

2. Personalized value proposition: the ability to launch products and value-added services tailored for specific customer segments or niches. It is part of this differentiation attributes such as services, card design, price, incentives or benefits, and communication.  Personalization goes beyond income-based segmentation, it also should consider behavioral and non-visible segmentation attributes. 

3. Intelligence and data-driven decisions: data and AI can positively influence assertiveness and ultimately increase the effectiveness of key-issuers processes: 

4. Active Sales to reach the desired customer segments that will drive more quality to the portfolio and benefit activation levels. 

5. Credit limit scoring and adjustments based on real-time and behavioral data. 

6. Transaction behavior assessment to predict churn, credit limit increases, etc. 

7. Communication approach (unlock, activation and usage) driven by customer’s data, preferences, and channels. 

8. Fraud prevention (transaction and onboarding) aiming to reduce fraud levels while at same time improving customer satisfaction and protection. 

9. Customer support levering historical data and multi-channel interactions. 

10. Operational efficiency: operating efficiently allows players to unlock additional benefits to their customers as well as invest more in product development and customer experience.  The efficiency gains come from categories such as selling and acquisition costs, transaction processing, communication costs (online and offline), customer support and logistics. Also, note that a lower unit cost combined with a lower activation rate is equally bad for business. 



Some banks have limitations to unlocking the potential of credit cards, and this leaves them behind in the competition. In general, the limitations seats in: 

1. Technology: cards processing platforms adopted have low levels of flexibility for new features and functionalities. The time and costs spent implementing new functionalities by internal or external teams jeopardize the business opportunities. This is just one example of how technology can be a business bottleneck. 

2. Insights to action: available data are not fully converted into business insights and actions. In other words, the decisions are not based on data, so the assertiveness is low, and the action’s effectiveness is jeopardized. 

3. Strategy and product fit: sometimes the product is good, but just for a specific portion of the bank customer base. Occasionally, banks need to review their market positioning and define prioritized segments before investing in product development.  

4. Goals: profitability comes from active cards, but the sales team sometimes is not fully aligned with it. The overall success of an issuer should combine the metrics and teams’ goals (sales, communication, operations, and customer support teams). 

5. Security processes/procedures: sharply implemented to reduce fraud levels (e.g.: chargebacks). 

Limitations above will potentially impact time-to-market, customer satisfaction (NPS), engagement (LTV) and business profitability (net margins). 



From strategy to technology execution, Compass UOL has a set of capabilities to support your company across the entire credit card journey, combining deep business and technology domains to accelerate all aspects of the differentiation to win. 

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