Cardholders are 22 percent more likely to be extremely/very satisfied with their bank overall if they’ve received an instantly issued card, according to new research from Entrust Datacard (conducted in conjunction with Javelin).
These cardholders are also more likely to believe their bank is innovative, trustworthy and reliable.
The study surveyed bank and credit union customers that had recently received a new account card and explored their perceptions of their bank based on the experience. Other key findings:
- Immediate replacement of lost or stolen cards builds customer trust and credibility: On average, it takes 4.8 days for a credit union customer to receive a centrally issued card following an identity breach. Compared to customers who received a centrally issued replacement card, customers who received an instantly issued card in-branch following a lost or stolen card are 30 percent more likely to express satisfaction with their banks.
- Instantly issued cards provide an opportunity for bank tellers to cross-sell and promote card activation: Centrally issued credit cards are only activated 60 to 70 percent of the time (as estimated by financial executives), but activation of instantly issued cards promotes 100 percent activation. Additionally, the short time it takes to print the instant card gives tellers an opportunity to build relationships and talk about other products with customers.
- Issuers benefit from $0.50 to $0.77 in incremental lift per card from interchange in the first month after a card is issued. In the five days a customer would have been waiting for a centrally issued card to arrive in the mail, cardholders who received their card instantly in the branch will be transacting and accruing interchange for the issuer.
- The satisfaction gap between banks with and without instant issuance is wider for customers replacing lost or stolen cards. Instant-issuance customers were 30 percent more likely to be very-to-extremely satisfied with their bank overall when replacing a lost or compromised card compared to those whose cards were centrally issued. In today’s climate of frequent data breaches and requisite card replacements, this could have significant value in winning customer loyalty and appreciation.
- Instant issuance clearly resonates with cardholders, but the benefits are not fully realized if this information isn’t articulated. If your institution already uses instant issuance, make sure to advertise this feature to new and existing customers who request cards online. Although asking a customer to make a trip to the branch might introduce undue friction to the process some of the time, other customers would would rather have their card several days sooner. Offering the option to pick up a card in-branch gives customers control and makes an institution appear considerate and flexible.
- When deciding to implement instant issuance, consider hardware for printing EMV cards. Although these machines and cards may be more costly, EMV will soon be ubiquitous and consumers will shift away from non-EMV cards. Additional studies by Javelin have shown that EMV card awareness can also have a significant benefit on the perception of a financial institution as secure and innovative. The cross-selling opportunity at the point of instant issuance is a perfect time for articulating the benefits of EMV to the customer.
- Tighten Know-Your-Customer (KYC) protocol in the branch. Although instant issuance will make a dent in mail fraud, training employees to recognize in-person fraud schemes will help to reduce new-account fraud and account takeovers that take advantage of instant activation.
The study notes that the rise of instant issuance of payment cards is in line with the consumer trend toward expectations of “immediacy.” The paper notes that “shifting payment card distribution from central issuance by mail to instant issuance in a branch has both financial and, perhaps more importantly, reputational benefits for financial institutions.”
Entrust Datacard, Minneapolis, provides solutions for card issuance, mobile payment, secure online identity and transaction authentication for financial services institutions.