Why Digital Banks and Digital Lenders Should Add Credit Cards to Their Offerings

If you're a digital bank, a challenger bank, or a digital lender, adding credit cards to your product offering could be a game-changer. It’s not just about offering more services—it’s about increasing customer engagement, boosting revenues, and staying competitive. But how do you make that happen, and what are key aspects to consider when incorporating credit cards into your list of product offerings?

What to Consider When Adding Credit Cards to Your Offering

When digital banks or lenders are thinking about expanding their offerings with credit cards, several key factors need to be at the forefront of your decision-making process. Speed to market and the ability to cut through red tape is essential to staying competitive in this rapidly evolving space. There are only 200 sponsor banks for thousands of fintech companies, meaning banks need to offer a compelling and efficient solution to attract customers.

You can start with the following questions to get the most out of your card program.

Is the card program central to your business?

• How much of your revenue and customer engagement will depend on this card program?
• Will it be a core driver of growth, or just a side offering?

How configurable is your system?

• Can you create custom rewards programs?
• Can you set different values for points or offer various redemption options?

What are your customers looking for?

• For individual consumers: cash-back rewards, travel points, or flexible redemption options.
• For business customers: expense tracking, cashback on corporate purchases, and custom rewards that match their business needs.

Why Adding Credit Cards Is a Smart Move

Now that you know what to consider, let’s explore how adding credit cards to your offering can create significant benefits for your business, including increased revenue, engagement and customer loyalty. ?

Drive Revenue and Customer Engagement

Cross-selling opportunities: If your customers are already using your banking services, adding a credit card program allows you to offer a one-stop solution. This strengthens customer loyalty and increases the likelihood that they will engage with more of your services.

Attract new customers: Launching a card program can also bring in new customers, especially businesses looking for a tailored financial solution that includes credit cards.

Build Customer Loyalty and Flexibility

Flexible, customizable rewards programs can help you differentiate your card from competitors’ offerings. Customers value the ability to redeem points for a variety of rewards, whether they’re applied to travel, merchandise, or cashback.

Modern technology platforms enable you to tweak and update card offerings based on customer feedback, which means you can stay relevant in the marketplace and better serve current and future customers.

Reduce Dependency on Legacy Systems

Many established banks are stuck with legacy technology that limits their ability to innovate and offer the cutting-edge products their customers want. Digital banks and lenders have the chance to leapfrog competitors by using modern, agile platforms.[MW1]?

With the right partner and technology, you won’t need to rely heavily on third-party service providers, meaning fewer hidden costs and more control over your business.

How to Successfully Launch a Card Program

So, you’ve decided that adding a credit card to your offerings is a good move. But how do you go about making it happen? You’ll need the right tech, the right systems in place, and a handle on the full scope of a card program.

Find the Right Technology Partner

Prioritize flexibility and speed to market: You need a technology partner that can help you launch quickly and adapt to the evolving needs of your business. Modern platforms allow you to manage your program with minimal third-party intervention.

Take control: Make sure the platform allows you to design, launch, and manage your card programs on your terms. You should be able to push products to market without unnecessary delays.

Account for Key Operational Factors

Program management: Whether in-house or outsourced, you’ll need a solid system to manage your card program.

Fraud prevention and transaction monitoring: Security is a top concern. Make sure your technology partner offers built-in tools for transaction monitoring and fraud prevention.

Customer support: It’s crucial to have a system in place to address customer concerns, such as a reliable call center for cardholders.

Be Aware of the Full Scope

Entering the credit card space is more than just putting up a card offering on your website. You’ll need to:

• Handle legal and compliance issues.
• Ensure a smooth process for underwriting and issuing cards.
• Consider how much of the transaction fees you'll take as the sponsor for the card program.

Why Episode Six?

At Episode Six, we specialize in helping digital banks, lenders, and B2B financial services expand into the card space. We offer the modern technology and support you need to:

• Launch quickly and efficiently, without being bogged down by legacy systems.
• Customize your offering, whether you’re targeting consumers with cashback rewards or businesses with corporate expense tracking.
• Take control of your program from day one, with minimal reliance on third-party service providers.

Adding a card program can transform your business. Whether you’re just starting out or looking to grow, Episode Six can help you get there faster and more efficiently. Reach out today to learn how we can support your card-issuing needs.

By focusing on speed to market, customer-focused rewards, and choosing the right partner, digital banks, lenders, and B2B financial services can grow their offerings and gain a competitive edge in today’s fast-paced market. Let’s build something together.