Issuers have been able to offer card
customisation services to their customers for quite some time. With
the growth in online banking and developments in instant issuance
technology, it would seem like an easy way to engage. But, asks
Jane Cooper, is it really wise to offer people too much
choice?
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The world has moved on since the legendary
statement of Henry Ford, who, when he first introduced the car to
Americans, said that they could have any colour they wanted “so
long as it is black”.
Now it is far more than just the paintwork
that can be customised to make a vehicle unique, and the trend has
spread far beyond. Ordering a coffee in Starbucks, buying a pair of
jeans, or choosing a case and apps for an iPhone are all ways in
which customisation is reaching the consumer on a mass scale. And
the trend is gaining momentum in the cards industry, as issuers to
compete increase wallet share.
It remains to be seen whether card
customisation will be fully embraced by issuers. Its advocates
argue that issuers will be able to attract – and keep – more
customers if they allow them to personalise a card, and when they
have such a card, customers are much more likely to use it.
Critics, however, argue that consumers can become confused with
choice, and that introducing such unnecessary options into the card
application process will add stress, and could put the customer off
altogether.
The customisation goes beyond offering
customers a choice of colours – as MBNA’s Virgin brand in the UK
has done – to actually tailoring the features of the financial
product itself.
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By GlobalDataThe customer is able to select a combination
of cashback, rewards, annual fees and APRs, giving them the type of
product they want. The process gives the consumer an insight into
the structure of card accounts in the sense that they will never
get something for nothing. If the cardholder wants the high reward
option, for example, the trade-off is that they will have to pay a
higher annual fee.
Other personalisation programmes just focus on
the final stage of this process, where the customer selects the
image that will be printed on their card. One of the latest issuers
of such a programme is Russia’s Rosbank, which uses Serverside
Group’s AllAboutMe platform – a web application that allows the
customer to upload a photo online so that it can be printed onto
their card. Other issuers already using the technology include RBS,
Banco Sabadell, ING, ANZ, Capital One and Swedbank.
Decisions, decisions
These efforts, however, are up against the
view that giving consumers options is confusing and they may avoid
the card product altogether.
Barry Schwartz, a professor of social theory
and social action at Swarthmore College, is one of the most
well-known propounders of this idea. In hisc book ‘The Paradox
of Choice: Why More is Less’, he argues that decreasing choice
reduces anxiety and stress. His theory rests on the idea of
‘decision paralysis’, a kind of information overload where people
are unable to make any decision if they are confronted with too
many options.
Sheena Lyengar, a professor at Columbia
Business School, has come to similar conclusions in her research on
consumers’ shopping choices. In her paper ‘When Choice is
Demotivating’, she goes against the received wisdom that more
choice is better, and argues that consumers are more likely to make
a decision when their options are limited.
Limiting options in this way is still possible
with card customisation, however. Tom Elgar, chief technical
officer and co-founder of Serverside Group acknowledges that people
could become confused if they were offered endless options in an
image gallery, but often people already have the picture they want
to use.
“What we find is that they have a simple
picture – their baby, child, dog or cat – the thing that they love
most. In reality it is something mundane to a third party, but it
is not just a nice picture, it is something that is really
important to that person,” he says.
He compares the process to selecting a
screensaver because users will not choose to change it until they
have decided on their image. The software works in a similar way as
the application sits on the online banking service and the customer
knows it is there even though they might not use it at first.
Eventually, as is the case with screensavers, once they have an
image they are satisfied with they will upload it. In this way the
issuer is not really offering options that could confuse: “They
only do it when they have got the one thing in mind,” Elgar
says.
If an issuer does have a library of images, it
is only advisable to offer this broad range of choice once the
customer knows exactly what they are looking for. Elgar gives the
example someone looking for a picture of a polar bear. If that’s
what they want then a picture of a grizzly bear will not suffice,
and the image would have to be a match for what the customer
already has in their mind’s eye. ‘Decision paralysis’ would be
avoided because the decision has already been made.
The combination of online banking and digital
printing mean that the costs are coming down in offering such a
service. And in an environment where banks could do more to endear
themselves to their customers, this is certainly one way of
softening the image of financial institutions. But whether it will
ever be something that banks actively market to their customers is
another question.
