How Smart Banks are Winning with Modern Card Issuing Programs

When you see your bank’s competitors thriving with credit card issuing programs, do you wonder how they do it? They’re not doing it alone. Partnership and collaboration are key to building a lucrative, modern card issuing program. Your bank can enter the market seamlessly and successfully—without massive upfront investments or infrastructure implementations.

What are your options?

Your successful bank competitors probably have a partner that meets their issuing needs. These needs vary from bank to bank. There are three primary partnership options for banks looking to offer credit cards  to their customers:

1. Hybrid Issuing Programs – The Smart Choice for Profitability & Growth – Best for banks looking to maximize profits while minimizing operational burdens.

Hybrid issuing programs, like CorServ’s turnkey solution, offer the best of both worlds:

• Higher revenue potential than traditional agent bank programs.
• Full control over your program’s profitability (own your P&L).
• Active participation in credit decisions to better serve customers.
• Retention of valuable cardholder data for deeper customer insights.
• Outsourced customer service, technology, and account issuing while allowing your team to focus on growth.

Unlike agent bank programs that strip away control and earnings, a hybrid, modern card issuing model gives you the strategic advantage of maintaining customer relationships while leveraging CorServ’s expertise to handle the end-to-end complexities.

2. Agent Bank Programs – A Limited, Low-Potential Approach – Best for banks that want minimal involvement in customers but satisfied with low returns and sub-standard customer experience.

• Agent bank programs require little effort but come at a cost:
• Earn less than 1% in referral returns, significantly limiting profitability.
• No control over credit decisioning or customer data.
• Reduced ability to strengthen long-term customer relationships.

Agent bank programs are referral-based solutions that manage all credit decisioning, cardholder data, and customer services. While low-maintenance, agent bank programs are not a viable path for banks aiming to build a strong, competitive credit card program that drives sustainable revenue or fosters long-term, deeper customer relationships.

3. Direct Issuing Programs – High Reward, High Complexity – Best for banks with the ability to manage full compliance infrastructure and resources to fully manage a self-issuing program.

Direct issuing programs provide maximum revenue potential and involves:

• Making decisions to fully customize the products for their market.
• Ownership of all interest, fees, and interchange revenue.
• Full responsibility for compliance, customer service, and network settlement.
• Principal membership with payment networks such as Visa, Mastercard.
• Advanced technology infrastructure and operational expertise.

CorServ partners with banks that want to pursue direct issuing by providing seamless technology and operational support, ensuring efficiency without the heavy lifting.

How does the competition find customers for their modern card issuing program?

Successful card issuers place a focus on personalized customer relationships, and specifically their relationships with business and commercial customers. Business customers are the most profitable for banks. According to Forbes, more than half of all business leaders use credit cards for their speed and convenience, and many businesses used credit cards for 50% or more of their total spending. They are looking for a financial ally they trust, and they are more likely to seek that out from lenders and bankers they already know.

Here is how you can grow your customer relationships and boost your bank’s profitability:

1. Leverage the Power of Data: Find an issuing partner that allows you access to detailed cardholder data. It’s critical to understand your cardholders, their credit activity, and their purchasing behaviors. When you gain insights into customer behaviors, you can tailor products and offers that deepen relationships and drive engagement .
2. Prioritize Business and Commercial Customers: Small and middle market businesses want credit to come from their local relationship bank, but those banks often don’t offer credit cards or outsource to agent bank programs. This could contribute to a loss of revenue for banks that don’t own their P&L and interchange income.
3. Deliver a Top-Notch Customer Experience: Give your customers the tools they need with a modern experience. With CorServ’s partnership, banks have access to custom-made marketing materials, branded cards, next-gen customer interfaces, and experienced customer service representatives. Customers are more likely to have several accounts with financial service providers that make banking easy and accessible.

Ultimately, the most critical step in building a modern card issuing program is picking the right partner – someone who can give you the reins while filling the gaps in your bank’s capabilities. Reach out to CorServ today to find out how we can help.