The number of credit card applications have soared in the past year, with banks doubling their efforts in handling these record numbers of credit card applications. This has been the sharpest rise since March 2007, according to a study by the Bank of England. However, banks are increasingly being unable to allocate sufficient time and resources to servicing the unusually high numbers of applications.

Challenger banks and smaller financial institutions have been flooding the market and nipping at the heels of larger, established national banks. Consequently, there is increasing pressure on traditional banks to demonstrate to current and potential customers that customer service is at the forefront of their agenda.

The consequence of this renewed customer focus is large volumes of financial instruments being offered to the market, including more diverse categories of credit cards.

A critical pain point for banks is the challenge of processing credit card applications quickly and efficiently. Any lag when servicing incoming applications jeopardises the reputation of traditional banks in the eyes of the customer, opening new opportunities for challenger banks and fintechs which trade on their speed and agility. Surges in application frequency, such as banks have seen over the past year, can put stress on the processes that traditional institutions have in place to respond in timely fashion.

One way for banks to combat this is to utilise the benefits offered by technology such as automation. This is a trend that has seen great successes in other industries, and it continues to grow in popularity within the banking sector.

The benefits of automation are two-fold, with advantages being observed in both cost saving and productivity measures. The most significant process improvement banks observe is the ability to release employees from manual application processing to more customer centric activities. Put yourself in the shoes of the customers- they want to be able to apply in a quick and easy way. Harnessing the benefit of automation streamlines the on boarding process of applications which will trickle down to the end consumer. At one multinational bank, over 80 per cent of customers found customer service to be exceptional after the firm implemented streamlining technologies into the credit card application process.

Streamlining administration duties is key to supporting such large volumes of credit card applications, a process that otherwise requires a huge dedication of time and resources and which copes very poorly with increases in the number of applications. The key advantage to implementing automation when processing these applications are that the application process itself becomes more streamlined, and in turn, timelier, shielding customers from any application friction. 

Aside from potentially significant cost to the business associated with error frequency, making errors that eventually become evident to the customer reflects poorly on banks, causing overt damages to a bank’s corporate reputation. The benefit of reducing human error is twofold, with both reputational damage and process glitches having the potential to cripple banks customer service efforts.

The requirements for banks to implement technology that streamline credit card processes is self-evident. We can only expect the number of credit card applications and approvals to rise1 as the market becomes saturated with a younger and more diverse crowd of financially savvy consumers who demand more diversified lending options to manage their own personal finance requirements.

Looking forward, retail banks would be wise to realign business process efforts to put the customer at the forefront of all business functions. The only way to achieve this is to implement the appropriate technology necessary to take human capital away from tedious and time consuming back-end processes and redistribute resources to customer service management. Once this has been achieved, banks quickly and efficiently handle applications and allocate the essential care and attention that every customer is due. 

Puneet Taneja, Head of Operations, Intelenet Global Services