BAI Managing Editor Lou Carlozo
Lou Carlozo Feb 9, 2017

For CaixaBank customers, a sweet deal is in the cards

For all the energy banks expend to make their risk modeling strong, customer enthusiasm, at best, has been weak. For starters, the average consumer couldn't tell a risk model from a runway model; it's by and large a behind-the-scenes matter they neither know nor care about.

But here's what they do know: Typically, a bank’s red tape slows down response time, makes credit applications complex and results in denials that often seem to come out of nowhere.

To that end, Barcelona-based CaixaBank has made key breakthroughs in risk modeling through the smart, shared use of business-side data analytics. In the process, they’ve also set a formidable benchmark for this year's BAI Global Innovation Awards, which will accept nominations this February.

CaixaBank edged out U.S.-based competitors CBW Bank and America First Credit Union, finalists of the Award, to be named winner of the Innovation in Payments category for the 2016 BAI Global Innovation Awards.

The value proposition for consumers is as direct as can be—expressed in the slogan "No customer without a card."

In a video outlining how it all works, CaixaBank describes its instant online credit card application process this way: "When a customer wants to apply for their credit card online, all they have to do is upload their identification card and their personal data is automatically populated."

The only added step, if you're a new customer, involves uploading some basic financial information. Once new and existing customers finish the speed application, an approval can be issued almost immediately, with the just-issued card available "in seconds." Also upon acceptance, the customer can access web-based card statements that feature colorful circle graphs, much like the kind featured on many personal finance management websites. 

This can all be done on the go via smartphone, meaning that getting a CaixaBank credit card can represent the literal equivalent of a stroll in the park (a scene depicted in the bank’s video).

“With instant credit scoring, approval and card issuance, as well as alternative product offerings, the end-to-end journey provides an exceptional user experience and increases acquisition results,” says Adrian Li, deputy chief executive of The Bank of East Asia in Hong Kong and a judge for the BAI Global Innovation Awards.

Li adds: "The market is trending towards instant credit card approval and issuance and CaixaBank has broken through many of the bottlenecks that other banks have encountered."

Put another way, CaixaBank customers can potentially obtain their cards in less time than it takes to use them. "Zero waiting time is very competitive, and this solution is a role model for the future of credit card applications,” Li says.

The cards are also cross-banded, bearing the orange-and-yellow insignia of Repsol, a Madrid-based oil and gas company. "CaixaBank’s co-branded program with Repsol is a win-win solution for applicants and the bank," Li says.

But if you think that merely stands for another one of those loyalty programs, guess again. The cooperative effort also allows CaixaBank to leverage Repsol’s database—meaning the financial institution can cross-reference clients, which proves beneficial on several levels.

"First, it gives a clear picture of existing consumption patterns, allowing CaixaBank to offer tailored credit options that best suit clients’ needs," Li explains. "In addition, it substantially reduces risk, giving CaixaBank the necessary information and flexibility to produce accurate risk models and control credit limits."

Of course, there’s always the issue of what happens when the instant application results in an instant denial. To that end, CaixaBank has developed a way of helping customers hang in there—again, with very little waiting.

The application system will recommend alternative credit products to applicants. These include a credit card with a lower limit, a debit card or a prepaid card. All told, the process makes CaixaBank Europe’s first financial institution to guarantee that all customers and non-customers learn the outcome of their applications.

In the process, CaixaBank has also tackled a bank-side challenge—creating a stronger risk modeling process—by taking the unlikely route of improving the customer’s side of things. Li sums it up this way, “CaixaBank’s risk modeling innovation has changed the online business model for credit cards and consumer loans.”

So CaixaBank emerges with a more robust way to evaluate creditworthiness, while the happy customer gets a credit card in about the same amount of time it took you to read this article.

Lou Carlozo is the managing editor of BAI.

CaixaBank won the Most Innovative in Payments Award at the 2016 BAI Global Innovation Awards. In addition to CaixaBank, the 2016 finalists included: CBW Bank and America First Credit Union. 

BAI will be accepting submissions for the Awards program now through April 28, 2017. The Awards are open to banks worldwide.  To learn more about the awards and submit nominations, please visit BAIGlobalInnovations.com.

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