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The CRM Program Of Business Development And Risk Management Of Credit Card

Posted on:2005-02-18Degree:MasterType:Thesis
Country:ChinaCandidate:X J ZhangFull Text:PDF
GTID:2156360152970764Subject:Business Administration
Abstract/Summary:PDF Full Text Request
Consumption, investment and export are main factors in pushing forward national economic growth. Recently, the increase of economy mainly depends on the unitary pull of investment, especially the investment for fixed assets, instead of the increase of customers' needs. Simultaneously, the enhancement of trade protection and trade bulwark weakens the affection of the export on the increase of economy. These two scenarios become the main reasons of slow increase of domestic economy. Therefore, consumption becomes the effective means for pulling economy rise. But the domestic market is dominated by the viewpoint of belittling consumption. Customers prefer saving than loaning. Under such a culture and historical background, the business of credit card develops slowly. The unique functions of credit card, consuming and loaning, are always suppressed.As a high-profit and easy-spreading product, credit card becomes one of the most quickly developing financial services, with China' s opening up financial market and entry into WTO, it is the most probable field that the foreign banks will enter this field firstly. However, according to the ideas of services, technical methods and operating patterns, China' s business of credit cards still large behind that of the developed countries. Confronting with the huge potential domestic market of credit cards, we cannot ignore the competitive advantages of the foreign banks, which are really impact the growth of domestic business of credit cards. China' s commercial banks cannot avoid the challenges and competitions.There have been lower profit margin and slow development in the sector of credit card business in China. The main reasons are the low ability of business development and risk management of operation banks. The vitality of the business of credit cards is to develop of customers. Foreign banks will mainly struggle for the top 20% customers who will bring them 80% of the whole profit; the management of risk is essential in the competition of the business. The profit will be maximized if and only if the bank can find the trade-off between risk and revenue. In order to undertake the most suitable risk; therefore, the business development and risk management have become the two important factors which greatly influence on the continuous development of the business of credit cards. Unfortunately, domestic banks are still lack of effective solutions on these issues. The viewpoint of "one to one" which focuses on the customer has become the strategical base for business development and risk management. The CRM represents the "one to one" viewpoint concretely, which can enhance the earning ability of the credit card business effectively. Therefor, CRM is the necessary choice for development of the credit card business in the domestic market.Regarding the above-mentioned background, this essay will concentrate on the insufficient domestic business of credit cards, and offer Customer Relationship Management (CRM) to solve the problem of business development and risk management. The methodologies are as followings: establishing a unified Data Warehouse to manage the information of customers; sharing the information and resources of customers in the banks that issue credit cards; offering "one-to-one" personal services by Data Mining and Segmenting to improve the value, satisfaction, contribution and faith of customers to the banks and promote the banks' ability in competition; analyzing the fundamental information of customers and data of transactional behaviors to research the habits of consumption, preferences and regular patterns of customers; establishing predictive models to manage risks and finally maximize theprofit margin of the business of credit cards.Information technology, which has played a crucial role in the development of financial markets, is also becoming more and more significant in the business of credit cards due to the sharp competition in this market. The CRM program of developing customers of credit cards and managing risks will supply domestic banks of iss...
Keywords/Search Tags:credit card, business development, risk management, "one to one", CRM (Customer Relationship Management)
PDF Full Text Request
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