"Post-Corona" Card Companies' Breakthrough: "Digital First" Leveraging Offline Strengths

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[Asia Economy Reporter Ki Ha-young] Card companies have been advised to leverage their strengths in offline sectors and implement a 'Digital First' strategy across three areas?channels, products, and marketing?in order to survive the rapid digitalization triggered by COVID-19.

Jinhyuk Kim, Executive Director at Mastercard, stated this on the 25th in a report titled "The Future of Card Companies and Directions for Digital Innovation." On the same day, the Credit Finance Association published a collection of materials under the theme "Post-COVID Era: Challenges and Development Directions for Credit Card Companies" instead of holding the 9th Credit Finance Forum to prevent the spread of COVID-19.

Executive Director Kim emphasized that card companies must find a breakthrough for the future through data business. He explained, "While strengthening the social connection between consumers and merchants in the offline sector where strengths still exist, it is necessary to maximize the added value of data through a Digital First strategy and enhancement of data analysis capabilities."

In fact, COVID-19 accelerated the digitalization of the consumption and payment markets, serving as a catalyst for online platform companies to enter the payment market. Although card companies have attempted gradual digitalization in most business areas through digital transformation strategies, Kim analyzed that such strategies have limitations in competing with online platform companies born digital.

Executive Director Kim advised that card companies need to strengthen the social connection between consumers and merchants in the offline sector where they hold strengths, providing marketing channels that can target customers for small and medium-sized merchants, thereby securing differentiated competitiveness from online platform companies. He emphasized, "Rather than pursuing Digital Only, card companies need to utilize existing legacy systems and implement a Digital First strategy across channels, products, and marketing, while maximizing data added value through strengthening data analysis capabilities."

In the short term, it is advantageous to provide advanced digital experiences centered on flagship digital product groups while simultaneously enhancing offline linkage activities. This is because it is difficult to achieve digitalization of all channels, products, and marketing company-wide within a short period. Executive Director Kim suggested, "In the long term, card companies should prepare for future competition and meet consumer expectations by redefining core competencies centered on data."