Study On Systematic Approach To Credit Card Risk Management

The modern credit card is one of the recurring consumption loans in essence. Since its born in 1946, credit card business has achieved enormous development in the world. Credit card department is among the most beneficiary departments in most advanced foreign banks and it generates an important part of revenue in the bank's intermediary business.Accordingly, credit card business also comes into a lot of risks, including those in credit lines, operation, technologies and law. However, the banks in China during reforming stage lack a mechanism to systematically identify, evaluate and control the credit card risks.Through long-term practice, foreign banks has developed a valid and advanced managerial ideology and accumulated rich experiences. Such as Basel Agreement, The Integrity Risk Management rules by COSO Committee, the fourteen principles of Risk Management set by the Western Banks in Europe and America, Data Warehouse, Data Excavation, Managerial Information Report, Balance Scores Method, and Falcon Model. At the same time, with the practice of the PDCA Management and Correction Model in the world, it was gradually recognized and was proved to be workable and effective.By referring to those senior ideologies and advanced risk management experiences from the advanced foreign banks, with the internationally common used PDCA management and correction cycle, this article suggests a systematic solution model to credit card risk management, which includes four modules and 20 managerial elements. Further, this article also gives detail analysis on the requirement and content of practicing this model, and give some suggestions on how to put the systematic solution in effect and ensure the efficiency of the credit card risk management..