Less than a decade since being introduced in China, the credit card is now one of China’s fastest growing trends. The number of cards in circulation has skyrocketed from only 11 million in 2004 to over 200 million in 2010, and experts estimate the number of credit cards issued will continue to expand at double-digit rates over the next few years. Winning credit card ‘share of wallet’ is therefore a crucial challenge currently faced by credit card issuers in China. Of course, the multi-million dollar question is ‘how?’ To help answer this, Synovate conducted a survey with cardholders in China to better understand their banking attitudes and experiences.

Credit card use in China
Consumers aged 25 to 34 make up two thirds of the credit card population, with 72% of surveyed cardholders owning two or more cards. The increase in the number of cards between 2009 and 2010 also saw a noticeable change in cardholder behaviour. Namely, frequency of card use increased from 1.8 times per month in 2009 to 2.3 in 2010.  The average monthly transaction value also increased, rising a marked 17% to 1,500 Yuan.

Factors that influence card share of wallet
According to Synovate’s survey, the different touch points customers experience vary greatly in perceived performance. While cardholders are satisfied using online banking, card payment, monthly repayment, the statement, and the telephone hotline, areas such as value added services, supplementary products, and high fees clearly leave room for improvement. Consumer perception of overall bank performance also varies greatly. Cardholders who were surveyed rated the overall performance of their most used card as follows:

• ICBC Bank - 47% of cardholders rated it ‘better than most banks’, 38% said ‘same as other banks’ and 15% said other banks are better’.
• China Merchant Bank – 83% rated it ‘better than most banks’, 14% said ‘same as other banks’ and only 3% said ‘other banks are better’.
• China Construction Bank – 47% rated it ‘better than most banks’, 40% said ‘same as other banks’ and 13% said ‘other banks are better’.
• Bank of Communication - 54% rated it ‘better than most banks’, 38% said ‘same as other banks’ and 8% said ‘other banks are better’.
• Guangdong Development - 63% rated it ‘better than most banks’, 30% said ‘same as other banks’ and 7% said ‘other banks are better’.

Further research showed that the interaction points with the highest impact on customer experience are telephone hotline, repayment, payment with card, online banking, statement and application process (impact levels differ by bank). Banks that improve their performance in these specific areas will see deeper customer engagement and increased share of spend. Less than half of cardholders gave an excellent or very good rating to issuers in these areas, showing there’s much room for improvement.

Along with having high performance on customer touch points, another key area is image. Being seen as trustworthy and as a bank that consumers have confidence in are the two most important emotional factors that drive customer perception and equity towards banks. When it comes to functional factors, providing secured as well as easy-to-use and convenient services are key.  Continuous delivery on these brand promises in a creative and consistent manner is essential in attracting and retaining cardholders.

The ways in which consumers get their information also should not be neglected when assessing their level of engagement. Synovate’s analysis showed that the communications garnering the most positive impact on share of wallet in order of priority are 1.) information about card issuers in the news, 2.) recommendations from family or friends and 3.) information on website. Cardholders’ exposure to different forms of advertisements is quite high (ranging from 19% to 27%) and, while it is a good way of generating awareness for card issuers, advertising is not one of the more effective ways to strengthen customer engagement.

This research highlights the key areas that banks in China need to consider to win the ongoing ‘share of wallet’ battle. While focusing on all of these areas may not be feasible, banks can work on any of the top four most effective touch points to better engage their customers. This, along with strengthening security to instill trustworthiness and confidence, while not compromising ease-of-use and convenience, remains essential to improving their own brand equity as well as their customers’ overall experience.

(About the survey: For two consecutive years, Synovate in China has conducted a survey with credit cardholders to help marketers understand their experience and attitudes toward various credit card issuing banks. The survey was last conducted online in August 2010, covering about 3500 existing and potential credit cardholders in China aged 18 to 60 years old.)

For more information, please contact Maggie Hew, Head of Customer Experience for Synovate Greater China at maggie.hew@synovate.com.