Competitive_Intelligence_Product_Benchmarking_O by Sutherland Global Services

Case Study and Sample Slides Product Benchmarking for Credit Cards

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Benchmarking of Personal Credit Cards Type

Study Objective

Geography

Timeline

Credit Cards

Benchmarking of Credit Card Products in a Country

11 APAC Countries

4 Weeks / Country

Client Ask • XXX engaged Sutherland to benchmark the personal credit cards portfolio for its client, a leading international bank with a global footprint, vis-à-vis the credit cards portfolio of the top ten banks in the respective country • The first level segmentation of cards was on card features in to: Travel, Co-branded, Cashback, Rewards and Exclusive. The second level segmentation was on the basis of income criteria: Mass, Emerging Affluent, Affluent and Super Affluent (Exclusive) • Sutherland built a credit card scoring model which involved scoring of 50-70 cards per country of leading issuers and a scrutiny of 75+ features of each credit card to arrive at a final score and subsequently a ranking for top cards in each of the above four categories

Sutherland’s Solution Credit cards are segmented by two parameters: 1.

Card Category: Cards are classif ied into dif ferent categories based on their f eatures

Travel

Income Segment: Cards are classif ied into dif ferent income segments based on the below criteria or on the basis of annual f ees, credit limit and select privileges Income Segments

Rewards

Annual Income Eligibility (AUD)

Annual Income Eligibility (USD)

<= A$60,000

<= US$58,200

Mass

Co-branded

Cashback

Exclusive

Others

Emerging Affluent

> A$60,000 to <= A$100,000 > US$58,200 to <= US$97,000

Affluent

> A$100,000 to <= A$200,000 > US$97,000 to <= US$194,000

Super Affluent / Exclusive

Above A$200,000 / By invitation only

Above US$194,000 / By invitation only

Currency conversion: USD 1 = AUD 0.97

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Benchmarking of Personal Credit Cards (Sample Extracts 1/6)

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Benchmarking of Personal Credit Cards (Sample Extracts 2/6) Travel Co-branded Rewards Cashback Exclusive

•

Citibank offers cards across all income segments and categories including Super Affluent – Exclusive category. It has 15 cards in its portfolio with a focus on Rewards category

•

Travel: Citibank’s flagship product, PremierMiles (VISA Platinum) card, is mapped to the Affluent segment. Citibank is among the select six issuers among all issuers under review that offers a Affluent Travel card. It offers high travel accident insurance (SGD 1mn) besides other travel privileges such as access to 600 lounges (unlike Amex travel cards)

•

Co-branded: Citibank offers 4 co-branded cards, one each in Transport and Telecom, and two in Retail categories. It is the only issuer which offers a transport related co-branded card with ‘Singapore Mass Rapid Transit’. About 28% of the co-branded cards are under retail sub-segment and are offered by only four issuers; Citibank being one among them

•

Rewards: Citibank offers 7 credit cards in the Rewards category and is the only issuer to offer redemption at 4 FFP associations on its cards. While Citi’s return on basic rewards (0.38%) is at par with other issuers in all three income segments, it offers premium points system on its rewards cards in the Emerging Affluent and Affluent income segments only

•

Cashback: Citibank has 2 focused cashback cards – Dividend VISA/MasterCard. The cards offer cashback on all spend categories

•

Exclusive*: Citibank is among the select issuers (8 out of 12 under review) in Singapore having an elite card for the Super Affluent income segment which hosts exclusive privileges such as a dedicated lifestyle manager, yacht rides, personal jet service, etc. to suit the opulent lifestyle of the target audience. The card is issued on an invitation only basis and is handdelivered by the lifestyle manager

Mass

Emerging Affluent

Affluent

Super Affluent

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Benchmarking of Personal Credit Cards (Sample Extracts 3/6)

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Benchmarking of Personal Credit Cards (Sample Extracts 4/6)

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Benchmarking of Personal Credit Cards (Sample Extracts 6/6)

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Benchmarking of Personal Credit Cards (Sample Extracts 1/4)

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Loyalty Landscape of Credit Cards Type

Study Objective

Geography

Timeline

Credit Cards

Loyalty Landscape of Credit cards

Indonesia

4 Weeks

Client Ask • XXX engaged Sutherland to conduct research on Indonesian credit card market, with the focus on landscaping the loyalty programs and product features of credit cards of all issuing banks and financial institutions in the country

Sutherland’s Solution Analyze Credit Card Features and Benchmark Issuers across Segments Segment Credit Cards Offered Gold

Tariffs & Charges Gold Silver

Solo

Silver

Platinum Ultima

Co-brand

Platinum

Gold Silver

Ultima

Platinum Ultima

• • • • • • • •

Annual Fees Late Payment Fee Cash Advance Fee Late Payment Fee Credit Over Limit Fee Card Replacement Fee Cash Advance Int. Charge Monthly Interest Charge

• • • • • • •

Point System Frequent Flyer Travel Insurance Medical Insurance Credit Shield Airport Lounge Other Benefits

DRAW USEFUL INSIGHTS

Identify Credit Card Issuers in Indonesia

Identify Credit Cards Offered

Loyalty Programs

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Loyalty Landscape of Credit Cards (Sample Extracts 1/3)

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Loyalty Landscape of Credit Cards (Sample Extracts 2/3) Variation in credit card features reduces and value proposition improves as user scales up from silver to platinum credit card segment Card Type

Silver

Gold

Platinum

Ultima

Parameter* Annual Fees (Rp.)

2.3

1 4,00,000

2.7

1 Monthly Interest Rate Purchase 4.75%

Late Charges Fee (Rp.)

Over Limit Fee (Rp.)

Monthly Interest Rate Cash

Card Replacement Fee

2.6

1 75,000

75,000

4,50,000

2.2%

3.75%

25,000

2.5

2.4

50,000

2.3

2.5

2.8

1 5%

1.8

50,000

Avg. 2.38

1,25,000

1,000,000

2.2%

75,000

2.7

2.5%

2.9

75,000

70,000

10,000

1.8

Avg. 2.50

2.8

3.75%

10,000

75,000

25,000

200,000

2.5%

50,000

300,000

9,000,000

2.2%

2.6

2.8

2.2

10,000

75,000

25,000

50,000

2.5%

50,000

5 1,000,000

3.1

3.58%

Avg. 2.67

3.6

5 2.75%

4.6

50,000

4.4

5 0

3.3

5 3.25%

4.6

5 0

Avg. 3.93 Average Rating

Source: Adventity Compilation

= Lowest Rating

= Highest Rating

Numbers below rating indicate value of the corresponding parameter for a given rating

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Loyalty Landscape of Credit Cards (Sample Extracts 3/3) Dominant issuers vary by credit card segments and within each segment issuers differentiate by focusing either on fees or on charges or by offering a balance mix of two Focus: Bank Rakyat–Charges, BCA–Fees, BNI–Fees

Focus: Bank Rakyat–Charges, Bumiputera– Charges, BCA–Fees

Silver

Rating Scale

Annual Income Req.

Monthly Int. Charge

Cash Adv. Int. Chg.

Annual Fees

Cash Adv. Fee

Late Paymnt. Fee

Card Over Limit Fee Bank Rakyat

BCA

Card Over Limit Fee BNI

Focus: Panin Bank–Mix of two, BCA–Fees, BNI–Charges

Bank Rakyat

Bumiputera

BCA 1

Rating Scale

Ultima

Rating Scale Annual Income Req.

Monthly Int. Charge

Cash Adv. Int. Chg.

Monthly Int. Charge

Annual Fees

Cash Adv. Fee

Late Paymnt. Fee

Late Paymnt. Fee Card Over Limit Fee

Card Over Limit Fee

1 BCA

Focus: HSBC–Fees, Citibank–Charges, Danamon–Fees

Platinum

Annual Income Req.

Panin Bank

Gold

Bumiputera

1 HSBC

Citibank

Danamoon

Source: Adventity Compilation

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Competition Landscape of Debit Cards Type

Study Objective

Geography

Timeline

Debit Cards

Competition Landscape of Debit Cards

India

5 Weeks / Country

Client Ask • XXX engaged Sutherland to understand debit card market competitive landscape with focus on the dynamics (key players, products, acquisition channels) of the underlying four banking account segments (Payroll Segment, Mass Market Segment, Preferred Banking Segment, and Private Banking Segment)

Sutherland’s Solution • Study Outline: Savings Account and Debit Card Segments

Mass Market

Payroll

Benchmark Issuers on the following parameters

 Features:

Reach / Network

 Marketing Strategies

 Number of ATMs

• Daily Cash Withdrawal Limit

 Promotional Strategy

 Number of Branches

• Daily Purchase Limit

 Expansion Strategy

 Number of POS etc.

• Add-On Card Facility etc.

 Tie-Up / Acquisitions

 Rates & Fees:  Card Issuance Fees Preferred Market

Business Strategies

 Any Other Initiative

 Annual Maintenance Fee

etc.  Benefits  Basic Cash Back Rate

Priority Banking

 Shopping Discounts etc.

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Competition Landscape of Debit Cards (Sample Extracts 1/2) While not the strongest in terms of debit card product features, SBI dominates the debit card competitive landscape in India using effective marketing strategies across segments Channels of Marketing Strategies

Debit Card Product Segments Mass Market

Strong

Preferred Market

Medium

Payroll Market

Mass Market

Payroll

Remittance

Retailers

Weak

Source: Adventity Compilation

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Competition Landscape of Debit Cards (Sample Extracts 2/2) Lower annual fees and incidental charges gave ICICI bank the edge over competition in the Indian debit card mass market segment Mass Market

ICICI

Mass Market Ranks 1 2 3 4

 Lowest card annual fees, lower incidental charges  Lower daily cash withdrawal limits and interest rates SBI

 Lowest card annual fees and higher daily purchase limit  Lower daily cash withdrawal limit, higher withdrawal

charges via non-principal

network

5 HDFC

6 7

 Lower card annual fees and withdrawal charges via non-principal network  Lower daily cash withdrawal and purchase limits Citibank

 Higher daily purchase limits, lowest incidental charges  Lower interest rates, higher card annual fees

Rating Sheet

HSBC

Please double-click on the above icon in the “normal view” mode to access the excel sheet

Source: Adventity Compilation

 Lower minimum account balance requirement and incidental charges  Lower daily cash withdrawal limit, higher incidental charges Note:  = Attractive Features for Customers  = Not So Attractive Features for Customers

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End of Presentation