Someone who only looks at large tech organizations and challenger banks may believe it is simple to launch a digital-first card program. Unfortunately, at least for those managing a legacy card program, it can be more difficult to upgrade an existing program to become digital than it is to launch a new program. Still, legacy card issuers are backed into a corner and have no choice but to innovate and compete against large issuers and new market entrants. Below are some of the hurdles and concerns for issuers to overcome:
- Innovation is a never-ending project: Digital issuance, push provisioning to a mobile wallet, a digital application with auto-approval, and other digital enhancements are on many roadmaps, but new functionality continually hits the market. Issuers that choose to innovate may be continuously playing catch-up, but at least they are less likely to become obsolete than those that choose not to.
- Technology and vendor will affect what can be done and how long it will take: Account approval and opening, card fulfillment, mobile wallet provisioning, transaction processing, online and mobile banking applications, and other back-end processes require multiple systems and vendors. Even if APIs are available, each unique system and vendor adds complexity to a project.
- Digital is an expectation: Cardholders, executives, branch bankers, and others will consistently ask for or demand innovations they have seen available with other card products. Issuers must weed through these demands and prioritize changes to focus on those that add the most value.
- The back office may take priority: It may be necessary to upgrade back-office systems and processes before launching customer-facing features. Doing so may give stakeholders (see bullet point above) the impression that nothing is changing, but it will avoid creating a beautiful front-end feature that the back-office cannot support.
The digital-first card program is the future of card issuance, and it is already here. Issuers should speak to their processor to see what functionality is available or planned for existing card systems. They should also consider integrating applications from third-party providers, such as Ondot Systems, that offer a digital-first card app. Even though they have many obstacles, launching new functionality and building a digital-first card program are musts for card issuers that want to survive and grow in the long term.
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