Indian society has evolved from a savings-focused and debt-averse country to a more consumption-focused, leveraged economy. With the growth of India’s credit economy and rising number of consumers applying for credit each month, this market is paving way for some interesting trends in the credit card industry.
The industry has shown significant growth over the years and this trend is expected to continue, propelled by rising urbanization, accelerated digitization and cashless spending. This transition can be noticed in simply the comparison between our parents always carried hard cash for shopping, travel or dine-outs and us, today, all we need is a credit card. The societal transition toward cashless payment has led to rapid penetration of credit cards among the millennials.
The attitudinal change toward the ubiquitous Credit Card has led to lending institutions recalibrating the card issuing and creditworthiness measures at their end. The latest trend in this business is issuing new credit card basis existing card statements, even if the statements are linked to other financial institutions!
Let’s have Mr. Bamrah check the validity of this update. He applied for a new credit card and yes, the only document sought was his last month’s statement, with statements from another institution now acceptable for evaluation.
At surface level, Mr. Bamrah’s statement gave basic details like his credit limit, due dates, payments etc. but is that enough data for a lending financial institution? A deeper dive by Perfios Credit Card Analysis gave a whole new world of data to the credit decisioning team of the lender to decide in favour of Mr. Bamrah. Let us take a sneak peek as to how lenders can benefit from the Credit Card Analysis feature in their lending portfolio -
Many financial institutions have started leveraging Perfios Credit Card Analysis and are offering personalized cards to attract new potential customers. While some might wonder whether this transition to cashless spending is lasting or transient, agility and adaptability will be key as the year reveals its new trends.
According to the latest data published by RBI, number of outstanding credit cards as of Sep’20 was 58.6 Million and the industry has expanded by an average of 20% in the last 3 years viz-a-viz an average of 15% in 10 years. The government's recent push to digital payment will further encourage the industry’s growth leading to a huge opportunity for lenders/FI’s to tap this potential.
Does this data raise further curiosity into expanding your credit analysis models and risk management tools?
To know more about Perfios Credit Card Analysis, click here.