The myth of the ‘no-fee’ card
What?
The absence of annual fees can be a compelling marketing tool. At the higher end of the market, the absence of fees can attract customers effectively. However, at the lower end, there are additional factors that influence the adoption and usage of a credit card, such as credit limits and interest on revolving credit. It’s possible that a no-fee card’s profitability may be on par with a fee-based card. To determine the best approach, a thorough comparison of two offers targeting a similar segment is necessary. In a dynamic business landscape, marketers often prioritize competitive actions over actual consumer behaviors in both scenarios. There are no definitive answers, as individual strategies play a significant role.
Financial services organizations have access to abundant data, including internal transactional data and external sources like FICO scores. Each organization has its unique perspective on the market, employing diverse tools to analyze the data and implement necessary adjustments. Successful organizations maintain dynamic and evolving models that adapt to changing environments. The most significant hurdle lies in building a team of skilled professionals at a reasonable cost to analyze the data and extract actionable insights from the vast amount of information available.
From our perspective, risk management revolves around the development of accurate predictive models. Two vital aspects of this approach are the Data Environment and the Model Environment. The Data Environment provides a flexible framework for accommodating evolving data availability. The Model Environment ensures that models remain not only accurate but also aligned with the data and business objectives. We have devised an approach to continuously monitor model performance, encompassing various model types and incorporating new data types. This monitoring process is conducted in collaboration with our partner organization.
Who?
To gain an accurate understanding of the marketplace, conducting analysis using the same cohort over a period of time is crucial. Comparing two different cohorts can lead to misleading conclusions and consequently incorrect actions.
Who?
With a longstanding partnership of 18 years, we have been dedicated to supporting our anchor client and gaining a deep understanding of their needs. Our team of analysts works closely with the client, providing valuable insights that enable them to make well-informed decisions and foster business growth. As a platform-agnostic service provider, we seamlessly integrate with the client’s platform. We can assemble a highly experienced team proficient in the tools and technologies you utilize, ensuring satisfactory results. For further information, please reach out to us at info@cclyticx.com.