Although the Asia-Pacific region is one
of the most rapidly developing card markets in the world,
ground-breaking innovations have been few and far between.
Titien Ahmad speaks to TS Anil of Citigroup about
the industry’s need to invest in new programmes and concepts.

The e-mail inbox of any writer covering the Asia-Pacific cards
industry is littered with press releases from issuers on
innovations such as card size, colour, degree of card transparency
and the angle of the curve on the bottom left-hand corner of the

The truth is that there have been very few innovations in the
region that have taken the market by storm. CI interviewed TS Anil,
Citigroup’s regional head of cards products and marketing strategy,
to discover his take on card innovations in a market that has seen
too few true advances.

In his presentation at VRL KnowledgeBank’s Cards and Payments
Asia Pacific 2007 Conference in Hong Kong, Anil said that the money
is not in the finer details of the card design but in potentially
market-disruptive initiatives that “change the game and create new
value streams”.

“It’s fine to be investing in the sustainable stuff but
disruptive innovation is where the money is,” he said in his

Elaborating on his point to CI, Anil pointed out that “the
struggle [in investing in disruptive innovation] is how to make it
happen. The question is – at which point do we declare something to
be successful? A number of things are running in pilot programmes
but are still at the test stage. I hope that there can be more
success because of the huge investment involved in each

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Anil sees the decision to invest as both an art and a science.
“In order to decide which of the many innovations to invest in, I
need to be personally convinced that the innovation is going to be
big, that it will generate excitement – there must be a ‘wow’
factor,” he said.

However, the issuer is not the sole decision-maker in a
successful product roll-out. According to Anil: “For any innovation
in the cards space, you would need three different stakeholders to
come together – the merchants, customers and partners. You need the
right merchants to be excited about it and the right partners to
push it to a tipping point until customers become a part of the

The Asian consumer has been largely receptive to new ideas and
there is thus more of a need to innovate constantly to keep the
customers interested in the issuer. “Asian consumers are more
receptive [than customers in the US] to certain kinds of technology
innovation, whether it’s mobile phones or cards. They have caught
on to new products before they caught on elsewhere. The diffusion
of innovations is different – it took many years before the
internet become big and meaningful in the US,” Anil said.

The lack of readily available market data in a number of Asian
markets can impede an issuer’s ability to innovate. Both positive
and negative data is available in only a few credit bureaus, with
most markets preferring to use either one or the other – if

A limited pool of data

Limited sharing of information across government departments
also makes it a challenge to cross-check data points. Citigroup has
been fairly successful in utilising the limited pool of data in the
region by leveraging existing relationships in a market through
corporate relationships, or applying collected knowledge from other
markets that have established Citigroup operations in other parts
of the globe. This enables the bank to create proprietary profiles
that collect and follow up on data to determine customer behaviour
and predictability.

Anil comes from that data-intensive background, having worked in
Capital One in the US prior to his current stint at Citigroup. “The
analytical approach has also been around in the US for a longer
time. Availability of data poses a challenge in transferring some
of the best practices from Capital One. The US market is very
data-intensive through data from the market and bureau, but not all
of the markets in Asia look like that. For example, the amount of
value that pricing innovation presented [at Capital One] was so
enormous that it required a whole team focused on pricing,” he

“In this region, there is a need for more education on this
front and the team needs to be comfortable with an innovation
before you roll it out. Having said that, the core concepts of
rolling out a cards programme are the same – the good thing about
the cards industry is that the basics are very similar whichever
market you are in.”

The other side of the high-profile innovation story is the
regulatory attention that it attracts. The region’s regulators have
been very careful of new consumer lending products that break the
mould, and they have set extensive regulations covering the various
aspects of the lending business. Anil points out that “regulators
are very active in most countries in Asia and in a lot of cases it
is for good reason, because the market is still maturing and
customers have to deal with offers that are ahead of the

Looking ahead, Anil sees that co-branding will enable Citigroup
to expand its card base in the region. The issuer has formed
partnerships in 37 countries and signed 33 partnerships in 2006.
Market reports cite more than 200 prospective partnerships for

“I am very excited about our co-branding activities across
markets. We are tying up with Garuda Airlines in Indonesia, Shell
in a number of markets and we are also doing a number of things in
India. Partners look at the value that we bring to the table. We
have worked with the biggest retailers in the US and retailers in
Asia can see that we understand the business,” said Anil.

Citigroup partnerships