Attack on "New Retail": CHINA CITIC Bank Pilot Credit Card 3.0 Era

Build an ecosystem with life scenarios and digital payment as the core.

——Xin Finance

Hong Luoxin/Wen

After nearly three years of industry adjustment, the credit card market has begun to show signs of "recovery". In particular, this change can already be clearly seen in the annual report data of the "first echelon" of credit cards.

Last week, China CITIC Bank Credit Card released its 2021 annual report. Among them, its credit cards have issued a total of 101.3239 million cards, becoming the first joint-stock bank to enter the "billion-level" club. The balance of credit card loans was 527.742 billion yuan, an increase of 42.510 billion yuan over the end of the previous year.

In terms of transaction size and pre-tax profit, China CITIC Bank credit cards achieved double-digit growth, up 14.05% and 23.29% year-on-year respectively. Not only that, in terms of asset quality, the amount and rate of non-performing loans have also dropped twice, with a non-performing ratio of 1.83% in 2021, down 0.55 percentage points from the end of the previous year.

Behind the eye-catching report card of China CITIC Bank Credit Card, on the one hand, it is affected by the external environment, the supervision and rectification of the industry is agitated, and the consumer market is upgraded; on the other hand, it is the result of internal changes due to the situation, timely adjustment of the rhythm and transformation of development methods.

It is worth noting that at the same time as the release of the annual report, China CITIC Bank disclosed the "new retail" strategy for the first time, and put forward the "three all five masters" service concept and strategy, with the goal of "four rings and two wings" to achieve the path and become a wealth management organizer.

It is foreseeable that as an important business segment, China CITIC Bank credit cards have played a key role in the development system of "new retail". Entering the credit card 3.0 stage, China CITIC Bank credit card is achieving a new round of leapfrog development and renewing its growth potential.

1

Credit card changes from the perspective of "new retail"

In the past year or so, China CITIC Bank has embarked on a series of organizational changes, business innovation and strategic positioning reshaping around retail finance. At friday's 2021 annual report launch, China CITIC Bank also systematically explained its "new retail" strategy for the first time.

Externally, China CITIC Bank hopes to seize market opportunities to meet customer needs and expand the "new retail" with wealth management as the main body. Internally, it is necessary to enhance the value contribution of the retail financial sector and become an important traction and driving force for realizing the "three complete" development positioning and the "five masters" customer relationship of the whole bank.

"Three completes": full customer service - full product supply - omni-channel reach;

"Five masters": the customer's main settlement, main investment, main financing, main service, main activity bank.

Compared with the past, China CITIC Bank believes that "new retail" should create value for customers and then create value for banks, and should pay more attention to customers' happiness and sense of gain. And in terms of the breadth and depth of customer coverage, it should be more than ever.

As China CITIC Bank opens the era of "new retail", as an important part of its retail financial sector, the development positioning and business ideas of credit cards are also reshaping.

As a financial product that is "opened" and used with high frequency, credit cards have evolved from simple payment and consumption tools in the past to a "bridgehead" for banks to reach and serve users. It is not only an important channel for banks to expand revenue and profits, but also the main position for obtaining new customers and operating customers.

In addition, compared with other financial products, the consumer payment attributes of credit cards can penetrate into many aspects such as customers' food, clothing, housing, and transportation, and the resulting multi-dimensional and high-frequency data can better help banks operate customers, promote value realization, and achieve three-dimensional financial services.

The goal of China CITIC Bank's "three completes" and "five masters" is essentially to provide a full range of integrated services, and may even go beyond the scope of finance to build closer customer relationships. This can also be seen in the evolution of the function of credit cards.

In recent years, a number of head card centers represented by the credit card of China CITIC Bank have focused on operating mobile terminal channels, and in addition to crossing time and geographical restrictions, the service content on the platform has long been extended from the financial category to the life scene.

According to the 2021 annual report data, as of the end of last year, the number of registered users of the "Moving Card Space" APP of China CITIC Bank's credit card was 48.04 million, an increase of 8.3 million year-on-year, an increase of 21%; the number of monthly active users was 16.3 million, an increase of 13.4% year-on-year. At a time when mobile Internet traffic is stuck in a growth bottleneck, this data is amazing.

This is already the 8.0 version of the "moving card space" of China CITIC Bank's credit card, relying on APP services to realize the full link to high-frequency life scenarios such as food and leisure, commercial supermarket fresh food, life services, recharge and payment. In addition to the "life + finance" ecosystem, personalized intelligent services have also been upgraded.

Not only that, in view of the innovation of different hardware terminals and the changes in the mobility of financial services, China CITIC Bank credit cards are also continuing to iterate, opening up and embracing new technologies and emerging fields.

For example, in 2021, China CITIC Bank Credit Card is equipped with the new ecosystem of huawei Hongmeng system interconnection of all things, creating mobile phone letter receipt and payment, watch letter receipt and payment under multiple terminals, atomization services and Huawei Hongmeng version of the "Moving Card Space APP", becoming the first financial institution to fully embrace Huawei Hongmeng ecology.

Not only is China CITIC Bank an outpost and bridgehead for serving customers, credit cards are also "pioneers" in the innovation and practice of retail financial products.

Last year, the state put forward the "double carbon" goal, and vigorously developing green finance was put on the agenda. On the eve of Arbor Day in March this year, the internal beta version of the "CITIC Carbon Account" launched by China CITIC Bank for individual users was launched, relying on the "Moving Card Space" APP of credit cards, which is also the first personal carbon account led by a domestic bank.

It is understood that the "CITIC Carbon Account" adopts big data real-time computing technology, according to the continuous iterative optimization of the emission reduction factor model, real-time calculation of carbon emission reduction in various life scenarios, support for low-carbon scenarios such as subway green travel, living expenses and other low-carbon scenarios, accurate reach, so that users can get a fast and smooth green life new experience.

According to the "CITIC Carbon Account", users of credit cards of China CITIC Bank can reduce carbon emissions by about 2 million tons per year through low-carbon behavior in online financial services, and the market potential for carbon emission reduction for users in the future is huge.

2

Disappearing "cards" and boundless "ecology"

The industry consensus is that credit cards are entering the 3.0 era of credit cards and mobile phones after the 2.0 era of physical cards and the 2.0 era of binding third-party payments.

The presence of physical cards is getting weaker and weaker, bringing not only changes in the medium of swiping cards, but more importantly, changes in the way users are reached and served. Therefore, China CITIC Bank Credit Card believes that "building an ecosystem with life scenarios and digital payment as the core" has become an inevitable trend in the future development of the industry.

This also coincides with China CITIC Bank's "new retail" thinking.

From the perspective of the realization path of "new retail", China CITIC Bank put forward the idea of "four rings" and "two wings", the former refers to the integration of plates, the linkage of the whole bank, the coordination of groups, and external connections; while the latter is digital capabilities and ecological construction.

Brett King, founder of The World's First Cardless Mobile Bank, Movenbank, wrote in the Bank4.0 era: "Banking Everywhere, never at a bank" (financial business is everywhere, but never in the bank).

In fact, as early as 2016, China CITIC Bank Credit Card put forward the business philosophy of "boundless openness", the essence of which is to break down the barriers of channels, scenarios and media, and to create a "boundless ecology" with partners by connecting different consumption scenarios and life scenarios.

In 2021, China CITIC Bank will join forces with head technology companies Huawei and Xiaomi to deeply lay out the mobile phone smart terminal ecology and consolidate its leading edge. The bank's "credit card in mobile phone" series of digital products, which was the first in China, showed its advantages and steadily promoted the credit card 3.0 process.

Among them, the digital credit card issued in cooperation with Huawei, China CITIC Bank Huawei Card, has been launched for many innovative iterations in the past year, and has now realized the application of multiple terminals such as smart phones and smart watches, with a cumulative application volume exceeding 5 million, becoming an industry benchmark product.

For another example, for the business travel segment, after years of accumulation and continuous optimization, the industry's largest and most complete business travel product management system has been built, and it has the advantage of closed-loop operation of the business travel chain, and continues to maintain its leading position in the industry.

Among them, the cooperative ecosystem includes 10 airlines, 2 domestic OTAs (Ctrip Group, eLong Travel Network), 1 global hotel group (InterContinental Hotels Group), 1 travel vertical partner (FeiChangzun), and 1 global travel loyalty program (Asia Miles).

By the end of 2021, there were 16.6137 million valid customers in the business passenger base of China CITIC Bank credit cards alone.

The basis for building an "unbounded ecosystem" and realizing unbounded services is the innovative evolution of digital technology and the iterative upgrading of agile organizations.

In recent years, under the business philosophy of "lightweight, digital and ecological", China CITIC Bank Credit Card has been promoting the digital transformation path of technology, organization and operation, and strives for the deep integration of services, products and technology.

For example, in terms of product development, China CITIC Bank Credit Card proposes a "technology + business" integration model. In 2021, more than 100 data technicians will be transported to the business team for deep integration, two-way empowerment, and the development efficiency will be greatly improved, the business needs assessment timeliness will be increased by about 42%, and the development delivery timeliness will be increased by about 25%.

Looking at the most important product marketing link of the credit card business, under the digital system, it can not only realize the scientific decision-making of the "customer-product-channel" full link, allow users to obtain personalized product experience services, but more importantly, greatly improve business efficiency.

It is understood that in 2021, the model empowerment of China CITIC Bank's credit card in the medium-income scenario increased by as much as 81%, and the installment product marketing model system achieved an increase of more than 1 billion yuan, further releasing the "productivity" through digital technology.

According to the latest data released by the National Development and Reform Commission, the total retail sales of consumer goods in 2021 will be 44.1 trillion yuan, an increase of 12.5% over the previous year, and the contribution rate of final consumption expenditure to economic growth will be 65.4%. The consumer market continues to improve, but the connotation and extension of consumer financial products and services have changed.

China CITIC Bank Credit Card is actively seeking changes, striving to stand at the forefront of the tide of science and technology, building a moat with unique advantages in the open ecosystem, focusing on the origin of "customer-centric" and renewing its potential in the bank's "new retail" territory, leading the credit card 3.0 era.