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"The year-end bonus discount has been passed on for nearly 3 years, and this year it finally got real and got a 5% discount. There are no major layoffs, but the HC (staffing) has been locked, and only in and out. ”
A person in charge of the credit card center department of a joint-stock bank told Titanium Media App.
At the same time, executive adjustments are also intensive. The above-mentioned person said, "So far in 2023, the main leaders of the credit card center have basically changed once, and everyone is no longer surprised by the emails notifying the changes in senior management. According to him, the vice president of the bank's retail line (in charge of credit cards and other businesses) has also just completed the replacement, but it has not yet been announced in the bank.
The operating pressures faced by this joint-stock bank card center are a microcosm of the challenges facing the credit card industry as a whole. The annual report shows that among the six major state-owned banks, 5 banks have negative growth in credit card issuance, and 4 banks have negative growth in credit card consumption. China Merchants Bank and Ping An Bank, the two companies with the highest transaction volume in the credit card industry, saw a decline in most of their credit card indicators.
In order to stabilize the development of the credit card business and increase the number of card openings, Titanium Media App learned that in the second half of 2023, the credit card centers of several joint-stock banks have invested heavily in promoting online streaming on platforms such as Douyin, but the effect is mediocre. A person from a stock bank said, "If the ROI (return on investment) of investment is really not correct, we will not spend money to buy traffic." ”
Structural adjustment is also in progress, and several bank card centers have recently announced their abolition, and the independent existence value of card centers as business units or franchised institutions has been questioned.
Zeng Gang, director of the Shanghai Finance and Development Laboratory, told Titanium Media App that especially for small and medium-sized banks, the independence of the card center as a business department or franchise department no longer has an advantage when the business development is in a downward cycle, and some banks have begun to reconsider the applicability of the card center as an organizational management method. "For banks with a weak foundation for development, it is time to re-examine the positioning of the credit card business. ”
Stressful credit card "transcripts"
According to recent data released by the People's Bank of China, at the end of 2023, the total number of credit and loan cards issued nationwide was 767 million, down 3.89% from 2022, a decrease of 31 million - a downward trend that has lasted for five quarters. Previously, in 2021 and 2022, the figures were 800 million and 798 million, respectively.
In terms of asset quality, as of the end of the third quarter of 2023, the total outstanding credit of mainland credit cards overdue for half a year was 93.742 billion yuan, an increase of 4.57% quarter-on-quarter, accounting for 1.09% of the outstanding credit balance of credit cards.
Changes in non-performing loans and non-performing ratios of credit cards of listed banks
The picture is also not rosy when it comes to specific bank performance.
According to the annual report data, among the large state-owned banks, only the Bank of China issued a positive growth in card issuance, and the others were all negative, with the largest decline being Industrial and Commercial Bank of China, with a decline of 7.27%. It is worth noting that the largest increase in the non-performing rate of credit cards in 2023 is also ICBC, which rose from 1.83% at the end of 2022 to 2.45% at the end of 2023, an increase of 0.62 percentage points. In addition, CCB's credit card non-performing loan ratio increased from 1.46% at the end of 2022 to 1.66% at the end of 2023, and ABC's from 1.23% to 1.40%.
At the same time, the growth of credit card consumption of major banks was sluggish, with the Industrial and Commercial Bank of China, the Bank of China, the Bank of Communications and the Postal Savings all experiencing negative growth, down 2.2%, 5.4%, 8.2% and 1.9% year-on-year respectively, while the Agricultural Bank of China and the China Construction Bank, which achieved positive growth, were basically the same.
Among the joint-stock banks, China Merchants Bank and Ping An Bank, the two companies with the highest transaction volume in the credit card industry, also saw a decline in most of their credit card indicators.
The number of circulating cards of China Merchants Bank decreased from 102,709,300 in 2022 to 97,118,100, a decrease of nearly 5.6 million during the year, a year-on-year decrease of 5.44%, which is the first time that China Merchants Bank has fallen below the scale of 100 million since it jumped over the 100 million circulating card mark in 2021, 69,740,400 circulating accounts, a decrease of 0.37% from the end of the previous year, a year-on-year decrease of 0.44% in credit card transaction volume, and a year-on-year decrease of 0.72% in credit card interest income. The non-interest income of credit cards decreased by 3.02% year-on-year.
The only improvement was in asset quality data, with the non-performing credit card loan ratio of China Merchants Bank in 2023 at 1.75%, down 0.02 percentage points from the end of the previous year.
In 2023, the number of credit cards in circulation will be 53,889,100, down 21.9% year-on-year, the number of new cards issued will be 1,375,400, down 33.56% year-on-year, and the annual credit card transaction volume will be 2.78 trillion yuan, down 18% year-on-year. The non-performing loan ratio of credit card receivables was 2.77%, an increase of 0.09 percentage points from the end of the previous year.
The number of cards issued or the number of customers of other joint-stock banks maintained positive growth. In the past year, the cumulative number of cards issued or customers of Minsheng Bank, China CITIC Bank, Industrial Bank, Zheshang Bank and Everbright Bank increased by 8.37%, 7.68%, 7.49% and 6.88% year-on-year respectively, especially Minsheng Bank issued 4.3944 million new credit cards in 2023, a year-on-year increase of 12.55%.
Online "survival" is not effective
Titanium Media App learned that in order to stabilize the development of credit card business and increase the number of card openings, several joint-stock banks have invested heavily in promoting online investment in 2023, but the effect is mediocre.
Previously, Titanium Media App wrote an article pointing out that Douyin, as a traffic platform, has also become an important channel for banks and consumer financial institutions to invest in flow (information flow delivery) and obtain customers after gathering a large number of C-end users. Internal employees of several consumer finance companies said, "Douyin accounts for the absolute majority of the company's investment, and the conversion effect is really good." ”
But for credit cards, online streaming doesn't seem to be magical.
The head of the marketing department of a joint-stock bank told Titanium Media App that in the second half of 2023, a leading joint-stock bank had spared no expense to conduct a live broadcast on the Douyin platform, "Even if the cost of opening a card goes to 400 yuan per sheet, it must be strung up to string up traffic, but the live broadcast will be suspended after about three months." At present, the live broadcast of Douyin card opening of several joint-stock banks has also been suspended. ”
According to him, banks generally complete the delivery through investment companies on platforms such as Douyin. According to the calculation of successful card activation, the traffic platform is paid according to the amount of card opening, and the platform rebates 3%-5% to the flow company, and the current general card opening cost in the industry is about 300 yuan per card. The person in charge explained that although the platform only charges according to the number of cards opened, it needs to invest a lot of material costs in the early stage, and a small number of cards will not be able to cover the cost.
He revealed that his bank had previously invested 30 million yuan to 50 million yuan in card opening on the Douyin platform in a single year, and 100 million to 200 million yuan in Internet omni-channel card opening and investment.
The marketing department lowers the budget, and so does the product promotion department.
The person in charge of the quality promotion department of a joint-stock bank said that he had reduced the investment budget since last year, "Douyin, B station, etc. have suspended cooperation, and the team responsible for Douyin investment is trying to turn to B-end cross-industry cooperation." If the ROI (return on investment) of streaming is really not right, we won't spend money on traffic. ”
The above-mentioned person in charge said that in the past two years, the bank's card center's product promotion budget has been cut by two to three percent.
In his view, the direct reason for the poor effect of streaming is that the overall customer positioning of the credit card business is relatively high, and although the current user scale of the traffic platform represented by Douyin is huge, the core "seed user group" of the platform is quite different from the customer positioning of the bank, "In the first two years, all banks are throwing money into the stream, but the market is limited." Now the traffic is getting more and more expensive, and the customer base is almost tapped, which means that the cost is high and the conversion rate is low. ”
Online channels have weakened, and offline has become more important. The above-mentioned joint-stock bank said that most of the bank's current credit card business increment comes from offline and branches, "At present, the proportion of online and offline channels in the industry is generally four or six open, and my bank has reached three or seven open." ”
Coincidentally, Lv Tiangui, vice president of China CITIC Bank, recently said at the bank's results conference that the bank's new credit card customers in 2023 will come from the conversion of related high-quality customers such as the bank's issuance, wealth management, private banking, personal loans, and corporate loans, and the number of new customers in the branch channel will exceed 2 million for the first time, accounting for 34% in 2023 from 4.5% in 2019.
"When you go more than three steps, your advertising dollars will be wasted. ”
The effect of credit card streaming on Douyin is not as good as expected, and it is not only related to the traffic platform.
A number of card center people also pointed out that the overly complex card opening link is an important factor affecting the conversion effect, "Users need to jump from the Douyin App to the bank App to apply for a credit card from the Douyin platform, and after filling in the information, they need to wait for the bank staff to take the initiative to contact them, and then send the card to the user." This period takes about two weeks, and many customers are not so patient. ”
This is already a relatively efficient process, the above-mentioned person said that credit card opening needs to comply with the "three relatives" principle (that is, when applying for a credit card, the card issuer needs to see the person, see the original application materials, and see the signature), subject to the unsolved online risk control problem, most credit card opening must be completed offline in the end.
"When you have more than three steps in the process of your product, your advertising dollars are wasted. The above-mentioned person said.
At the same time, credit cards are facing a tougher competitive environment.
In the retail finance market, consumers have more and more choices that are no longer limited to the bank's products. Many "credit card-like" online microfinance consumer products are booming, which are highly similar to traditional credit cards in terms of product design and consumption purposes, but have obvious advantages in terms of application conditions, consumption scenarios, and use processes. Even banks themselves are constantly developing such consumer credit products, which are also squeezing the market space for credit cards.
The above-mentioned card center person said, "At present, the post-95 generation does use credit cards less often, and users will only choose more convenient products." ”
On the marketing side, banks are also more conservative than Internet companies. The person in charge of the marketing department of the above-mentioned joint-stock bank told Titanium Media App about his personal experience:
Every year, the iPhone is new, and the general e-commerce platform can provide up to 12 interest-free installments, and our bank's e-commerce App will provide 24 interest-free installments, superimposed with various discounts, the price is almost the same as Pinduoduo, and it is guaranteed to be genuine. We wanted to amplify and publicize this advantage, but the industry seems to be very taboo about promoting lending products and cannot vigorously promote them.
In his view, when credit card products and services cannot keep up with user demand in a timely manner, and rate pricing and subsidies are limited, "banks must think about whether there is any change in the way they fight." ”
Card Center walks to the crossroads
With the pressure of the credit card business, changes and adjustments are intensively emerging.
Recently, local credit card sub-centers have been revoked one after another. A number of credit card centers and branches, including Huaxia Bank Credit Card Center Tianjin and Guangzhou Branches, Mengshang Bank Credit Card Center Hohhot Branch Center, etc., have ceased business.
Structural changes are also ongoing. For example, at the end of last year, Ping An Bank rearranged retail finance, abolished its business department, and did not retain a first-level department in the retail finance sector of the credit card center. A branch president of the bank told Titanium Media App, "At present, Ping An Bank's credit card business is still managed independently by the business department, and the branch and card center actively cooperate. ”
Earlier, Shanghai Rural Commercial Bank abolished its credit card department and merged its credit card business into big retail for management, which is the core business of the retail business, and it is quite rare for the credit card department to be eliminated as a department.
For example, Shanghai Rural Commercial Bank, which has abolished its credit card department, recently announced that it will migrate the credit card APP function of Shanghai Rural Commercial Bank to the mobile banking app from July 1, 2024. Earlier, Bohai Bank also removed the credit card APP.
A person from the joint-stock bank card center told Titanium Media App that the two project teams of the bank card center's mobile app and e-commerce have recently completed the streamlined merger.
Under the above background, the independent existence value of the current card center has been questioned by some people.
It is understood that bank credit card centers are usually divided into two categories - franchised institutions and independent business divisions, especially the former is more independent.
Zeng Gang, director of the Shanghai Finance and Development Laboratory, told Titanium Media App that credit card centers as franchised institutions or independent business departments enjoy a certain degree of autonomy in personnel decision-making, although the card center does not hold a legal person license and is less independent than a separate subsidiary (such as a wealth management subsidiary), but the franchise institution holds an independent business license, which means that banks headquartered in Shanghai can also set up departments in Shanghai.
"This arrangement provides business convenience, credit card centers can be located in Shanghai, enjoy the advantages of independent business, separate accounting, etc., set up in developed areas, and can also meet the needs of personnel and technology investment. Zeng Gang introduced that in addition to not enjoying the convenience of setting up card centers outside the head office, the card center of the business division system has other advantages similar to that of franchised institutions.
At present, credit card franchises are indeed mainly concentrated in Shanghai. As of the end of 2020, there were 12 credit card franchised institutions in Shanghai, and the total loans of credit card franchised institutions accounted for 47.50% of the national credit card market. China Merchants Bank, Agricultural Bank of China, China Construction Bank and Bank of Communications have all set up credit card centers in Shanghai.
Zeng Gang believes that due to the importance of the credit card business, many banks have established card centers to provide them with a relatively independent management model. In the upcycle of business development, this independence facilitates rapid development. But in a correction cycle, sometimes the advantage becomes a disadvantage.
Liu Xiaochun, former president of Zheshang Bank, once wrote an article pointing out:
Due to the performance-linked incentives, but also due to the stimulation of departmental interests and the personal interests of the person in charge, it is a common phenomenon for business divisions to expand their business more aggressively. Since personnel, finance, and risk management are self-contained, although the degree of specialization is increased, because there are no external constraints, the risk is greater. The business development of the industry and industrial division is rapid and the performance is remarkable in the rising period of the industry and industry; once the industry and industry enter the downward period, the entire business department is likely to fall into collapse and there is no room for adjustment.
A banking observer told Titanium Media App that some banks are currently trying to transfer credit card centers to branch management, or decentralize some functional departments to branches. A person from the card center of two joint-stock banks said that at present, their banks have not increased the cost and manpower of the credit card business of their branches, but in order to reduce costs, the card centers are indeed shrinking.
In Zeng Gang's view, the credit card industry is not the time to "step on the accelerator", the credit card industry may be greatly differentiated in the future, and card centers and business divisions with business advantages will still be retained and developed, but small and medium-sized banks will be adjusted. (This article was first published on Titanium Media APP, author | Cai Pengcheng, editor - Liu Yangxue)
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