Gilbert Arira, BNP Paribas’ head of cards and electronic
banking, has outlined a four-point plan designed to unlock the
underexploited potential of its cards business.

In an interview with Cards International, Arira said
the reorganisation of BNP Paribas’ retail bank, which aims to link
up its international consumer banking enterprise, would help the
cards business take advantage of its global scale. He also mapped
out his strategy to increase the cards unit’s profitability –
including an ambitious aim to sign up each of its 17 million retail
banking customers to a card product:

• ‘One account, one card’: Arira said the bank is aiming to
cross-sell cards to more of its retail banking customers across the

• Activation: ensuring customers continue to spend on BNP
Paribas (BNPP) products once they have signed up for a card

• Customisation: allowing customers to choose card designs and
customise features, benefits and loyalty on cards

• Internet distribution: the business aims to originate 10
percent of card sales through the internet within the next two
years, and offer online customisation services.

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BNP Paribas, which won CI’s award for Best Consumer
Finance Business in 2007-08, has 45 million cards in issue, 25
million of which are credit cards and 20 million are debit and
deferred debit cards. Of those, 39 million are outside France. The
cards unit, which is now part of the bank’s Personal Finance
division, contributes around 8 percent of BNPP’s retail banking
profit. That equates to a half-yearly profit of roughly €196
million ($278 million) on retail banking profit of €2.45

Arira added: “We are going through a major reorganisation in
retail banking to become more globally focused, and cards will be
one of the main drivers in the organisation. It is starting now and
the goal is we want to be a global player.”

Arira believes the best opportunities for growth exist in
Central and Eastern Europe (CEE) where credit cards are not
widespread, Latin America, and in North Africa. In many CEE
countries, credit card businesses see an opportunity to switch
consumers from salary cards, used mainly to withdraw cash from
ATMs, to more advanced product offerings which can be used for
internet and point of sale purchases.

The bank is also placing an emphasis on standardising cards
products across its subsidiaries and building universal platforms
to reduce costs and improve customer service – a process also being
undertaken by rival HSBC.Arira said the main issue in the cards
industry remains the uncertainty around interchange from the
European Commission. The Commission recently ruled MasterCard’s
cross-border fee illegal, and is also investigating Visa Europe’s
cross-border interchange charges. But it has continued to push the
idea of a third pan-European scheme to compete with Visa and
MasterCard, which it recently indicated may be permitted to charge

Arira added: “The Commission is saying one thing one day and
something else the next. It is difficult to know where they want to
go. It is a critical component of the business – one-third of it
comes through interchange – and in many areas if you come to zero
interchange you come to a non-profitable business. There are also
pressures in the US as well and it is difficult to invest without
knowing what the return on investment will be.”

See the next edition of CI for a more in-depth
interview and a case study of BNPP’s co-branding business in

Business Split

William Cain