Money & Banking

‘We recognise customers now reside in digital ecosystems’

K.R.Srivats New Delhi | Updated on October 02, 2019 Published on October 03, 2019



Citibank India has been enjoying pole position among foreign banks in the Indian credit card space. In an interaction with BusinessLine, Arjun Chowdhry, Head of Credit Cards, Payments and Unsecured Lending, shared his views on the secret behind Citi’s success. Excerpts:

What is the current standing of Citi in the Indian credit card industry

pecking order?

Citi is a preferred credit card brand, with leadership position in terms of preference. According to RBI data, the average amount spent per card is 1.4 times than that of the industry. Interestingly, the driver for this is better customer engagement – our cards are used twice as often as the industry average in terms of transactions per card/month.

We achieve this through our product structures and partnerships. Citi has also been ranked No 1 in our Net Promoter Score (NPS) survey in India for the last four years, reinforcing this leadership position. Among foreign banks, we are the No 1 credit card issuer in India by far.

Have cards in force increased for Citibank in recent years? Could you please share some data points?

We have been judicious in our market segmentation, and have continued to grow in our target segments. The cards in force have grown around 5 per cent every year over the last few years. For us, the important yardstick is customer engagement measured by spends and transactions per card, since that indicates the value clients derive from our products. We have maintained a 1.4 time spends per card versus the industry average, and transaction frequency at two times the industry average.

We recognise customers now reside in digital ecosystems. Thus, going forward, we believe that better customer value is provided by a partnership between issuers and the ecosystem. We pioneered that trend with our recent partnership with Paytm; Paytm First Credit Card is India’s first-of-its-kind – digitally delivered, an unlimited cashback card, with automatic statement credits and integration with the partner’s ecosystem.

What new innovations and offerings can one expect from Citi in the next six months in the credit cards space?

We recently introduced the Paytm First credit card, India’s first credit card with 1 per cent universal unlimited cashback. In the next few months you will see other offers and schemes with iconic brands, bringing value for all the spending needs of customers.

Our transformation of the card to the app will continue – for example, earlier this year, we launched a unique offering called Citi Pay with Points. This is a solution that enables customers to redeem their reward points directly for a purchase transaction, simply via a few clicks on the mobile phone. We will be extending this, and will also open up new segments for customers to redeem their reward points digitally.

How is the demand for credit cards playing out in India? Is it muted because of the slowdown, or has the demand for credit cards gone up?

We believe the trajectory for growth of India’s credit card has a long runway ahead. Credit card penetration in India is still very low, relative to the market and in comparison to other countries, even after the rapid growth seen in the last three-plus years. Today, there are4.9 crore credit cards in circulation, and this set of customers continues to spend higher than the average. We believe this occurs because customers see the value from using their credit card, such as deferred payments, discounts, rewards. And with 86 per cent of transactions still done in cash, there is plenty of room to grow for credit cards.

How has the journey been so far for Citi in the credit cards space in India? What are the aspirations, going forward?

In a word, this journey has been, and continues to be exhilarating. Citi India has been a pioneer in the card industry – from launching the first credit card to introducing the first co-branded credit card and providing instant loans on our credit cards. Approximately 40 per cent of our cards are sourced digitally, and we want to continue growing our base via digital channels.

The cornerstone of the strategy, going forward, is digitisation – the card transforms into the app. The Citi customer has seen a slew of features being brought online and on to the Citi app – redeeming rewards, taking loans against the credit card itself, and even setting limits for overseas spending. Our strategy is rooted in the belief that superior digital experience will be the key differentiator in the future, and we are developing our usage offers and propositions, and the entire card lifecycle, on that premise.

Are we moving to a 2008-like situation where the credit cards industry, in its bid to gain business volumes, handed out cards to even those who were not creditworthy?

We believe the Indian consumer lending industry is far more evolved, and a lot more responsible than it was in 2008-09. Access to data and its analysis gives us the opportunity to try new approaches to manage risk.

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Published on October 03, 2019
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