Application Of Credit Card Sales Channels

The credit card industry in China has entered a rapid development stage. Until 2006, 54 million cards have been issued domestically by 18 credit card issuing agencies. More and more banks have entered credit card business and are keeping launching all kinds of credit card related products. In 2007, more than 700 credit card products are launched in this single year. With card products growing but only little difference in between, card issuing banks are now paying more emphasis on sales channel development and utilization. However, compared with the mature credit card market in foreign countries, China market is still in its early stage with relatively rough regulations and systems. The long term growth of this market would be impaired if banks do not perform detailed market research, directly copy foreign banks' approach, or lack cost and risk control when developing sales channel management.This thesis would make the following three recommendations on sales channel strategies based on the current situation of China credit card market and characteristics of card issuing banks.1.Bulge bracket domestic banks should primarily focus on branch channels which will be further supplemented by in-bank cross selling as well as direct-sale channels. The unique advantage of big banks is their large quantities branches and enormous customer base. Sales and marketing directly targeted toward existing customers as well as customer flow at branches will allow rapid expansion of card holders with a relatively lower cost structure and operation risk. Therefore, large banks should spend great efforts in building branch channels and promoting to customer flow at branches. In addition, they should actively pursue cross-selling opportunities to existing customer base. Given large banks usually do not have enough field sales force, it is import to establish a direct sales team to compensate for this weakness and thus help drive the market growth.2.Mid or small size domestic banks should adopt a direct sales management, with additional sales and marketing utilizing partnership database and emerging channels. These banks usually have short operating histories, small number of branches and limited customer base. As such, building a high quality direct sales force would be essential to fast acquiring customers and expanding market. Other and emerging new channels, such as promotion via partnership database or internet marketing, could also be tried by mid-small banks. As current regulations on credit card sales in China are far from perfect and there still lacks full legal protection on domestic utilization of commonly used approaches in foreign countries, banks should establish a comprehensive cost control and risk control system to avoid high risks associated with card issuance.3.Foreign banks should adopt a mixed management using both branches and direct sales channels. With the gradual opening of domestic financial market, it will not be long before foreign banks will be able to conduct credit card business in China. Compared to domestic banks, foreign banks have multiple advantages such as ample experience and flexible internal systems. Foreign banks should stick closely to their local branches and promote to existing and new customers, since these banks usually have a small presence but a. high concentration customers. At the same time, it is critical to build direct sales force in important regions to develop new customer base and expand to other regions gradually.China should also establish comprehensive legal system and regulations and improve individual credit system to regulate credit card sales channels and lower general risk levels, with the goal of providing a healthy and orderly environment for the development of credit card sales channels.