Strengthen the management of card issuance and control the chaos of interest and fees——

Credit Card Business Says Goodbye to "Staking"

　　Our reporter Wang Baohui

　　A few days ago, the China Banking and Insurance Regulatory Commission and the People's Bank of China issued the "Notice on Further Promoting the Standardized and Healthy Development of Credit Card Business" (hereinafter referred to as the "Notice").

Experts said that the "Notice" adheres to a problem-oriented approach and specifies regulatory requirements for credit card issuance management, credit card interest and charges chaos, etc., which will promote the credit card business from the extensive development stage of "staking" to specialization, differentiation and refinement. a new stage of high-quality development.

　　Standardized interest charges

　　In recent years, the credit card business of my country's banking financial institutions has developed rapidly, and has played an important role in facilitating the payment and daily consumption of the masses.

However, some banking financial institutions have extensive business philosophy of credit card business, inadequate risk management and control, and behaviors such as harming the interests of customers.

The person in charge of the relevant department of the China Banking and Insurance Regulatory Commission said that some banking financial institutions have unclear disclosure of interest and fee levels, one-sided promotion of low interest rates and low rates, disguised interest charges in the name of handling fees, obscured actual use costs, and unreasonably low bills. Issues such as the starting point or no starting point of the installment, and the implementation of automatic installment without the customer's self-confirmation, make it difficult for the customer to judge the cost of using funds, and even increase the customer's interest and fee burden.

　　To this end, the "Notice" emphasizes that when banking financial institutions enter into credit card contracts with customers, they shall strictly perform the obligation of prompting or explaining the terms and risk disclosure contents such as interest, compound interest, fees, liquidated damages, etc., and notify them in an obvious way. The client exhibits the highest annualized interest rate level.

　　"Financial institutions should effectively improve the standardization and transparency of credit card interest and fee management, and ensure reasonable pricing and transparent information disclosure for credit card interest charges." Reasonably determine the level of credit card interest charges to reduce the burden of interest charges on customers; on the other hand, the collection of interest charges should be notified in advance to protect consumers' right to know.

In addition, it is necessary to continuously innovate information disclosure methods and multiple interest and fee notification channels to ensure that consumers are informed of interest and fee collection information in a timely and accurate manner.

　　In accordance with regulatory requirements, commercial banks are strengthening the standardized management of installment business in an all-round way, and present key information such as interest fee items, annualized rates, and interest fee calculation and collection methods to customers in a clear and conspicuous way to help customers accurately understand the use of cost.

The relevant person in charge of the Credit Card Center of China Everbright Bank said that the current scientific formulation of credit card interest and fee levels provides preferential credit prices for high-quality customers who meet the conditions, reducing the interest and fee burden on customers.

In the next stage, the bank will further enhance the level of differentiated and refined pricing, and promote a reasonable decline in the level of credit card interest and charges.

　　It is worth noting that with regard to the interest charges for installment business, the "Notice" specifically requires that banking financial institutions must display all interest and charge items, annualized interest rate levels and interest charges that may be incurred by the installment business in an obvious manner on the first page of the installment business contract (agreement). Calculation method; when showing the customer the cost of using funds charged for installment business, it shall be in the form of interest, and shall not be in the form of handling fees, unless otherwise stipulated by laws and regulations.

　　In addition, in order to comprehensively strengthen the standardized management of credit card installment business, the "Notice" requires that banking financial institutions shall prudently set the amount and duration of credit card installment overdrafts, and specify the minimum initial amount and maximum amount for the installment business.

The term of the installment business shall not exceed 5 years.

If the customer really needs to apply for installment repayment for the cash advance business, the amount shall not exceed RMB 50,000 or the equivalent in freely convertible currencies, and the period shall not exceed 2 years.

"For credit card installment business, banking financial institutions should specify the minimum starting amount and the upper limit of the maximum amount, and use the form of interest to uniformly display the cost of using funds for the installment business, and should not induce excessive use of installments to increase customer interest charges." The person in charge of the relevant department of the China Banking and Insurance Regulatory Commission said. .

　　Strengthen sleep card management

　　Sleep credit card management is one of the highlights of the Notice.

The "Notice" requires that banking financial institutions should continue to take effective measures to prevent risks such as counterfeiting and fraudulent card issuance and excessive card issuance; set an upper limit on the number of cards issued by the institution for a single customer; strengthen the dynamic monitoring and management of sleep credit cards, and strictly control the proportion; The number of long-term sleep credit cards with no active transactions by customers for more than 18 months and the current overdraft balance and zero overpayment shall not exceed 20% of the total number of cards issued by the institution at any point in time, except for credit cards with additional policy functions; A proportion of banking financial institutions shall not issue new cards.

　　"The introduction of the sleep card rate red line has put forward higher requirements for the business philosophy of various banks." Gao Feng said, on the one hand, banks need to improve their ability to accurately issue cards and accurately locate potential card users, and analyze the front-end card issuance in the market. To meet the needs of customers, try to distribute the right cards to the right people, avoid too many customer cards and neglect management, and avoid the waste of resources in the production and follow-up management of bank cards.

On the other hand, banks need to improve their refined management capabilities. In the process of customer maintenance, they should make full use of data and models to identify the differentiated operating points of different customers, and do a good job in the dynamic management and control of cards in use by customers. Effective monitoring and control measures are indispensable. , to avoid the risk of sleep cards due to omissions in management and control.

　　With the rapid popularization and development of credit card business in my country's banking financial institutions, more and more customers use credit cards.

In order to improve the quality and efficiency of financial services, strengthen prudential and compliant operations, ensure the safety of customers using cards, and avoid the risk of fraud or loss, the "Notice" sets a regulatory red line for the rate of sleep cards.

At the same time, due to the blind pursuit of economies of scale and market share, some banking financial institutions have experienced excessive card issuance and repeated card issuance, resulting in disorderly competition, waste of resources, and excessive credit extension.

　　"In the future, the China Banking and Insurance Regulatory Commission will also dynamically lower the limit on the proportion of long-term sleep credit cards, and continuously urge the industry to reduce the proportion of sleep cards to a lower level." The person in charge of the relevant department of the China Banking and Insurance Regulatory Commission said that banking financial institutions shall not directly or indirectly use the number of cards issued, The number of customers, market share or market ranking are used as single or main evaluation indicators.

　　Under such circumstances, the issuance of the "Notice" is not only necessary but also urgent to strengthen the management of credit card business.

Zeng Gang, director of the Shanghai Finance and Development Laboratory, said that some commercial banks' credit card operations and management are over-indexed.

From a strategic point of view, in recent years, many banking institutions have been actively transforming into retail, and credit cards are generally used as an entry point and focus as an asset-based business.

However, in the process of business development, there are also indicators that simply use the number of cards issued, the number of customers, etc. as the assessment criteria, and the lack of a scientific assessment mechanism and incentive mechanism will inevitably lead to short-term credit card business.

At present, the credit card business is often the "hardest hit area" for complaints from various banks. On the one hand, it is related to the wide customer base and large transaction volume of the business. In other cases, it has also resulted in easy customer complaints.

　　In order to standardize the external credit card cooperation of banking financial institutions, the "Notice" clarifies from various aspects, and gradually clarifies the boundaries of rights and responsibilities.

The "Notice" requires that banking financial institutions should assume the main responsibility for the operation and management of their own co-branded cards, ensure that both parties to the co-branded card partners equally present their respective brands in all credit card-related business links, and must not directly or in disguised form allow the co-branded unit to perform banking duties or use it on its behalf. The joint unit brand replaces the bank brand.

　　The person in charge of the relevant department of the China Banking and Insurance Regulatory Commission stated that for the co-branded card business, the "Notice" prohibits banking financial institutions from directly or in disguised capacity to perform credit card business responsibilities on behalf of the co-branded unit. Equity services in the business area.

The analysis and monitoring of business risks, reputation risks and other adverse impacts of joint entities should be continuously strengthened, and risks should be strictly prevented from being transmitted to the institution.

　　Pilot online business

　　At present, although there are a variety of payment instruments and loan products in the inter-bank market, credit cards still occupy an important position in social and economic life.

　　In recent years, under the dual background of economic growth and strict financial supervision, the traditional corporate business of banks is facing bottlenecks. Many banks have carried out retail transformation to explore new development models, and credit card business is an important part of the retail transformation of commercial banks. ring.

Data shows that by the end of 2021, the national credit card and debit card combined stock reached 800 million (per capita card holdings reached 0.57), a year-on-year increase of 2.83%. Since 2015, the number of cards issued has nearly doubled.

As one of the basic tools for the personal credit business of various banks, credit cards are an important support for the transformation of banks' retail business.

　　"In 2021, the number of cards per capita will reach 0.57, which is relatively low compared with nearly 4 credit cards per capita in developed countries. Considering the situation that one person holds multiple credit cards, in fact, the penetration rate of credit cards in my country is still relatively low. It needs to be improved." Luo Yu, deputy director of the China Banking Research Center of Renmin University of China, said, but this does not mean that Chinese residents lack the means of overdraft consumption, because some Internet consumer credit products have emerged in recent years, and to a certain extent, with payment The activities are linked and constitute a complement to the issuance of credit cards by traditional financial institutions.

　　However, the differences between Internet consumer credit products and credit cards are: First, the opening of credit cards usually requires offline processing at bank outlets, while all transaction procedures for Internet consumer credit products are completed online; second, as a licensed institution Issued credit cards have higher access thresholds and stricter approvals, while Internet consumer credit has relatively low access thresholds and higher coverage.

Luo Yu said that this also brings some problems: First, the convenience of using traditional credit cards is not as good as that of Internet consumer credit products; second, in the development process of Internet consumer finance, there have been some irregularities such as inducing excessive consumption and causing excessive debts. Risks There are certain hidden dangers in prevention and control.

　　In this regard, the "Notice" clearly proposes to explore innovative models such as online credit card business through pilots and other methods in accordance with the principles of risk controllability, safety and order.

Gao Feng said that under the background of the rapid development of digital technology and the normalization of epidemic prevention and control, important changes have taken place in customers' financial consumption habits, and the number of customers at business outlets has been declining.

With the continuous innovation of business models, the continuous enrichment of product types, the continuous improvement of customer services, and the continuous reduction of usage costs, the development of online credit card business will become an important attempt for commercial banks to deepen digital transformation and accelerate the in-depth integration and innovation of finance and technology.

　　The key to developing an online credit card business is the remote face-to-face signature.

Remote interviews are an effective means to enhance customer experience and improve bank operational efficiency.

Gao Feng believes that the pilot development of online credit cards should do a good job in the selection of target customers, remote video technical support and online business process control.

First, in terms of target customer selection, priority can be given to existing debit card customers and customers with real consumption needs in consumption scenarios.

Second, in terms of remote video technology selection, in order to avoid risks from audio and video, operations can be locked on the bank-side APP, etc.

Thirdly, in terms of online business processes, while leveraging on face recognition and online verification, it also assists necessary manual customer service (remote tellers) to conduct online card application and identity verification with customers.

　　Earlier this year, the China Banking and Insurance Regulatory Commission issued the "Guiding Opinions on the Digital Transformation of the Banking and Insurance Industry" to vigorously promote the digital transformation of personal financial services.

Encourage banking and insurance institutions to make full use of technological means to carry out personal financial product marketing and services, expand online channels, enrich service scenarios, and promote the solution of the "digital divide" problem.

　　"Digital-based compliance and risk control capabilities will become the core capabilities of the bank's credit card business." Zeng Gang said that at present, the requirements for banks, compliance and risk control are more abundant and specific, and for a large number of retail customers, in the situation of continuous personalized operation In order to effectively support the business, it is necessary to have strong digital capabilities.

This capability requires long-term accumulation and continuous investment. Some banks have obvious first-mover advantages and are an important moat for bank credit card business.