The document discusses how credit card issuers can leverage customer transaction data to optimize profits through targeted customer engagement initiatives. It recommends a 7 step approach: 1) Implement customer analytics to understand purchase trends, 2) Design reports on spending patterns and profitability, 3) Customize campaigns based on customer insights, 4) Identify upselling/cross-selling opportunities, 5) Enhance individual customer profitability, 6) Improve retention through incentives, 7) Redesign value propositions for customer segments. Implementing this approach can potentially triple customer profitability through higher spend and superior retention.

1. Transforming data into dollars……
Unlocking
growth?

2. Page I 2
Introduction: The million dollar question

3. Are you turning your
data into dollars?
All banks capture reams of credit card transaction data.
Not many translate this data wealth into business
opportunities…
33% of credit card issuers engage in data
profiling.
• Who are your top 10 merchants and top 10 customers?
• What is your most visited merchant category?
Only 17% of card issuers leverage data
for static customer engagement
• Usage/ Transaction data driven merchant
acquisitions, alliances and discounts
• Segment based/ usage based promotions
• Profile based attrition management and cross
selling and up selling
Less than 3% of credit card issuers
use data for dynamic customer
engagement.
• Dynamic trip advisory
• Transaction alert driven
engagement (hotels,
flights)
Leveraging data
to tap customer
engagement
opportunities
can triple
profitability
The same customer base can yield 3X the
profitability when credit card transaction
data is used to identify customer purchase
patterns for developing activation and
engagement initiatives
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4. Page I 4
Seven steps to optimized profits

5. 7 steps to optimizing profits
Leveraging transaction and account profile data can triple
customer profitability…
A 360 degree view of the cards
portfolio, can lead to higher spend
generated from targeted engagement
initiatives, superior retention and
cross sales, and enhanced campaign
effectiveness.
Customer
Analytics
Value
proposition
redesign
Campaign
Customization
Customer
Retention
Profitability
by account
Dashboards
Up selling/
cross selling
0107
0206
05 03
04
Implement a cost effective
analytics framework that
forms the basis for profit
optimization initiatives. A
USD 25k solution can
produce millions in
revenue.
Deploy 3
automated
reports capturing
customer
purchase and
repayment
trends
Use customer insights
derived from 3 basic
reports to identify
themes for customer
engagement and target
customers/ segments
with tailored
campaigns.
Redesign card value
propositions for segmented
customer base. Target high
potential customers, having
multiple cards, by incentivizing
spend consolidation. Minimize
reliance on $ value and focus on
brand, service and exclusivity
Identify cross
selling/ up selling
opportunities
based on credit
history, purchase
and repayment
behaviors.
Prioritize engaging
supplementary cm.
Deploy “Usage
Based Attrition
Management”
initiatives to
improve retention
and customer
loyalty.
Improve avg. customer
profitability through
customer level activations.
Target engagement
initiatives at identified
customer needs, leverage
loyalty incentives, align
sales incentive with profit.
Perfect
Profits
Program
Transforming
data into
profit
Page I 5

6. Customer
analytics
• Implement a real time, low cost analytics solution that uses
basic card transaction data, such as transaction amount,
currency, merchant type, merchant location etc., to highlight
customer behavior trends.
• The solution will enhance your visibility at individual account
level, and allow customers to be managed and incentivized
based on current profitability and potential profitability.
Dashboards
• Design 3 critical automated reports that allow visibility
around profitability and card usage KPIs, at the portfolio and
the individual account /card level.
• These reports will cover card spend, merchant acquisition
and account profitability.
• The reports will identify profitable customers, profitable
merchant categories, merchant names, top revenue streams
for different customers etc.
• These insights will be valuable when designing customer
engagement strategies and card value propositions for
customer segments.
Campaign
customization
• Leverage customer insights to identify opportunities for
“targeted” customer communications.
• Targeted communications will enhance campaign
effectiveness by focusing the message content and proposed
incentives on the account/ customer’s established needs.
• The solution will result in:
• Identifying new merchant alliance and discount
programs
• Enhanced card spend through targeted marketing, based
on usage history
Step 1
Step 2
Step 3
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7 steps to optimizing profits

7. Up selling/
cross selling
• Analyze customer profiles and transaction histories to
identify opportunities for “targeted” cross/ up selling.
• Customers constantly utilizing credit lines and maintaining
good repayment history will be identified and recommended
for enhanced credit limits and/ or higher color card (based
on risk/ reward analysis).
• Prioritize supplementary cards acquisition, activation and
engagement. Accounts with supplementary cards contribute
50 - 70% higher spend than single card accounts.
Profitability
by account
• Identify opportunities for enhancing customer spend
through targeted engagements for 3 - 5k selected, high
potential customers. Design and implement:
• Purchase advisory services, where card transactions
trigger automated SMS/ email with profile based
promotions (e.g. top restaurant options for customers
checking into a hotel, discount alerts when visiting
certain merchants)
• Engagement strategies for frequent ticket purchasers
with low hotel spend and vice versa.
• Engagement strategies for frequent FX transactors with
low ticket or hotel spend
• Engagement strategies for selected 5-10k high FX
spenders.
• Engagement strategies for 100 top spenders and
identification of unutilized spend avenues.
• Deploy/ optimize loyalty program. Enrolled customers spend
twice as much as non-enrolled, whilst redeeming customers
can be spending 5 times higher!
• Align sales incentives with product profitability. Not all
products are profitable or equally profitable!
Step 4
Step 5
Support will be provided
on an on-going, 3
monthly, contractual basis
Support will be provided
on an on-going, 3
monthly, contractual basis
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7 steps to optimizing profits

8. Customer
retention
• Analyze customer profitability data (historic and potential),
to assign all cardmembers to one of five attrition
management categories.
• Design incentives to retain customers falling into separate
categories.
• Within each category, incentives will vary by degree of
discontent expressed by the customer, etc.
• Provide the Call center staff with a script and a “rewards
matrix” to use in addressing customer card cancellation
requests.
Value
proposition
development
• Leverage the customer analytics framework and derived
customer insights to redesign the cards value proposition.
Target at least 5 variants of the core value proposition at 5
distinct segments.
• Identify merchant discounts, alliances, promotions that
optimize customer satisfaction.
• Activate and leverage Visa/ Mastercard/ Amex global
alliance programs.
• Determine optimal pricing structure for the cards portfolio
• Design and rollout customer engagement initiatives that
specifically target high spending customers with an
inclination to revolve.
• Focus the new value proposition around incentivizing
consolidation of customer spending on to one single card.
• Minimize reliance on $ value offered to customers and focus
on brand, service and exclusivity when designing the
segmented propositions.
Step 6
Step 7
Support will be provided
on an on-going, 3
monthly, contractual basis
Support will be provided
for a 12 month period to
assist in launching the
new product
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7 steps to optimizing profits

9. Page I 9
Sample dashboards

10. Sample Dashboards
• Sample dashboard provides
breakdown of spend by region,
by top merchant categories and
by top merchants
• Also lists top spending customers
by product
• Sample dashboard provides
breakdown of customer spend by
region, by top merchant
categories and by top merchants
• Also lists month on month spend

11. Sample Dashboards
• Sample dashboard provides
breakdown of merchant
business by card type
• Also lists month on month
business volume
List of other
useful
dashboards
and KPIs
• Revenue dashboard
• Expenses dashboard
• Profitability dashboard
• Ageing dashboard
• New cards acquisition dashboard
• Authorizations report
• Collections report
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12. Page I 12
About the author

13. Page I 13
Noman Mubashir
Qualification and skills
 Noman has over 12 years of experience in product development, customer
engagement and acquisition and credit card portfolio management and has worked
with clients such as Standard Chartered Bank, ABN Amro, ACR Re, Munich Re, Dubai
Islamic Bank, Saudi Investment Bank, Riyad Bank, Gulf International Bank, Albaraka
Banking Group, and other leading financial institutions.
 He has been responsible for numerous product launches and market campaign
launches, both as a consultant and as an industry practitioner.
 As Director of Card Products at American Express, Noman has delivered business
growth through leading product design, packaging, communications, and customer
engagement strategies based on customer analytics.
 Noman has also worked for Ernst & Young as part of its MENA Advisory practice. For
over 6 years, he worked on projects in geographies including the GCC, ASEAN, North
America, South Asia, Central Asia and Africa.
 Before joining Ernst & Young, Noman worked for one of the largest Islamic banks in the
GCC, Dubai Islamic Bank where he was responsible, at different times, for customer
acquisition in various areas ranging from Visa cards, remittances, alternate channels,
Internet and Mobile banking, branch deposits and wealth management.
 Noman has a Masters Degree in Business Administration and a BSc. in Software
Engineering
 He is the lead author of several industry acclaimed reports on Islamic Finance,
including the EY Islamic Banking Competitiveness Report.
 He is a regular speaker at global conferences on Islamic finance and has presented at
conferences and seminars held in Morocco, Oman, Dubai, Bahrain, Sudan,
Netherlands, South Asia and Canada.
About the author
 Noman has been working in the financial services industry, as a consultant
and as an industry practitioner for over 12 years.
 He specializes in product development and portfolio management for retail
banking products. He is also a certified project management specialist.
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