Credit card services

The challenge for those working in the area is to increase their organisation’s share of the number of people who use a credit card for spending (wallet share) and the amount that customers borrow on their cards (debt share).

There are three main areas of work:

• Customer groups – working out what products the company offers, how the company makes money from those products and how to make them appeal to customers.
• Credit risk – developing financial models to understand trends in the market and work out which customers to lend money to.
• Strategy management – looking back at what the company has done in the past to analyse emerging themes and use this in future product development.

A credit card isn’t like other financial services products, such as a loan, where the customer is lent money that they pay back. With credit cards, the customer is given a line of credit that they can then use or not use at different levels over time, which increases the complexity of the risk involved.

Recent developments

Since 2005 a higher percentage of people are not paying back their bills. This has led to changes in the level of risk an organisation is able to offer to their customers. In the past about 46 million people took out a new credit card in the UK every year. This has reduced in recent years to around 4 million people as organisations have cut back on their lending – less credit is being offered to fewer people, so profits are being made through higher interest charges instead.

An increase in regulation has also seen organisations being made to reduce penalty fairs from £20 to £12. To increase profits companies need to find new ways to engage with customers. More aggressive promotional offers have been introduced, such as 0% APR deals lasting for longer periods of time, and greater use is being made of television and internet channels to market new products to specific customers.

'The level of complexity and focus on data analytics in credit card services allows graduates to get involved right from the beginning, creating new analytical information and product strategies.'

Starting out in credit card services

Graduates can join an organisation straight after graduation, although a number of people join one or two years later. They can be employed in marketing, finance and call centre operations roles, or in a specialist risk position. Employers include high street banks, direct players who provide services by internet and telephone, and partnerships between retail banks and financial companies. There are some graduate-level programmes that are management rather than analytically-based. The level of complexity and focus on data analytics in credit card services allows graduates to get involved right from the beginning, creating new analytical information and product strategies.

Skills for graduate credit card services jobs

For risk-based programmes, you’ll need evidence of good analytical skills gained from a maths, physics or engineering degree, a postgraduate degree or an internship. Recruiters are looking for people who can handle complex, analytical data but also use that data to implement new strategies. You’ll need to have the kind of personality that wants to get things done and be able to handle the pressure of working in a competitive market.

Steve Smyth is senior director - marketing and analysis at Capital One and has worked in credit card services for twelve years. He graduated from the University of Cambridge in 1998 with an MA in natural sciences and also has an MBA from INSEAD Business School.