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Podcast Link: Credit Shift
Summary:
In this podcast, the team discuss the challenges and opportunities in the credit industry. They delve into the factors contributing to the invisible population of credit-seekers, the dynamics of payment networks, and the potential for disruption in the financial services sector.
Key Points and Ideas:
- There are around 5 million adults in the UK who are considered invisible to credit reference agencies.
- The number of invisible individuals in the UK has remained relatively stable over the past decade.
- In the US, some consumers still prefer using cash, contributing to the unbanked population.
- Each year, approximately 2 to 3 million new 18-year-olds become eligible for financial services products in the US.
- American Express (AmEx) used to provide charge cards to young adults, creating high retention rates.
- Some UK consumers stick with their student account providers for life.
- Data can create biases and profiles that may not align with reality.
- Data coverage and bias pose challenges for organizations.
- The ability to generalize decisions based on partial data coverage is risky.
- Customer value metrics should benefit both businesses and customers.
- Visa and MasterCard fees have tripled from $33 billion in 2012 to $94 billion.
- Disrupting established payment networks like Visa and MasterCard is challenging due to their entrenched position.
- Apple and Amazon are potential disruptors in the payment network space.
- Large competitive markets with multiple players lead to better customer value.
- Peer-to-peer payment mechanisms may not be sufficient to disrupt the payment network.
- The cost of customer acquisition and retention is high in the US.
- Interchange fees in the US are unlikely to decrease significantly in the near future.
Key Statistics:
- Approximately 5 million adults in the UK are invisible to credit reference agencies.
- Visa and MasterCard fees have increased from $33 billion in 2012 to $94 billion.
- 2 to 3 million new 18-year-olds become eligible for financial services products annually in the US.
Key Takeaways:
- The invisible population of credit-seekers remains a challenge in the UK.
- Innovative approaches are needed to address the unbanked population in the US.
- AmEx’s strategy of offering charge cards to young adults created strong customer retention.
- Understanding customer behavior beyond data is essential for businesses.
- Disrupting payment networks like Visa and MasterCard requires significant effort.
- Apple and Amazon could potentially disrupt the payment network industry.
- Customer value metrics should benefit both businesses and consumers.
- Peer-to-peer payment mechanisms may not be the ultimate solution for network disruption.
- High interchange fees are a significant driver of fintech economic models in the US.
- The cost of customer acquisition and retention remains a challenge in the US financial market.
- Balancing data with customer insights is crucial for businesses.
- Developing payment solutions that reach consumers is key to success in the financial services sector.
Podcast Score:
| Categories | Count |
|---|---|
| Facts | 17 |
| Ideas | 6 |
| Opinions | 4 |
| Recommendations | 4 |
| Total Score | 31 |
Marketing – Promotional Mentions: 5
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