The ROI of digital issuance
With the investment of digital issuance comes some key areas of savings and profitability. Randy Piatt, the head of product solutions at Ondot, recently outlined the ways issuers can increase their profit margins by offering digital issuance.
- Call center operating expenses
When consumers have access to digital self-service capabilities in-app, it reduces the need for inbound calls to the financial institution. As much as 80% of call center conversations revolve around payments. By giving cardholders the ability to get, use, and manage cards through a mobile app, the operating expenses related to these moments will be greatly reduced.
- Non-interest income related to increased transactions and spend
Offering digital issuance means that consumers will have access to a digital – and access to spending – immediately. A plastic card can take as long as 10 business days to arrive, but with digital issuance a card can be accessed and pushed to the top of the digital wallet in just moments. This greatly reduces any transaction attrition that has traditionally occurred when cardholders needed to wait for a lost or stolen card to be replaced, while also decreasing the cost of rushing a plastic card to the consumer.
- Net interest income related to deposit accounts
On the debit side, by remaining the preferred card the overall deposit amounts available in these accounts will remain at their highest levels. From a credit perspective, increased revolving balances and usage also provide an ability for the issuer to profit further from the reduced down time on the card.