The US credit card industry’s slowing growth and consolidation has put pressure on banks to optimize the management of their existing customer base and therefore the tradeoff between profitable growth and controlling losses. In order to achieve these objectives, risk managers require a detailed understanding of their portfolios’ risk dynamics relative to their peers. Unfortunately, there are few sources of benchmark data that provide accurate and credible comparisons of risk performance.
Argus’ Risk Dynamics Study (RDS), launched in 2007, is the newest of the firm’s syndicated studies and was specifically designed to address these needs. The study leverages the US CCPS dataset of nineteen issuers and over 50mm US consumer card accounts, but reports are designed to address key risk topics, including:
- Credit line management, including initial line assignment, line increases, line
decreases, and utilization
- Over limit behavior, including authorization, profiles of over limit accounts, and
fee assessment
- Account and asset delinquency, delinquent balance growth, balance control ratios
Payment behavior
- Financial performance, including risk-adjusted margins and profitability
In order to ensure the relevancy of the Risk Dynamics Study, data is reported on a monthly basis (rather than the quarterly basis used for Argus’ CCPS), and all data is reported on a month-end basis (rather than cycle-based data, as is used in CCPS).
As with the US Credit Card Payments Study, participants use Argus’ benchmarking data to evaluate their programs relative to customized benchmarks of similar programs. Each participant receives:
- Additional ad-hoc analytic support in which issuers may request customized
analyses
- Monthly benchmarking binders that compare issuer performance to a customized
benchmark, including summary performance metrics, full income statements, and drill-down
tables detailing line management, over limit behavior, delinquency, balance control
ratios, payments, and risk-adjusted financial performance
- Semi-annual senior management presentations that provide an in-depth review
of benchmarking results
Issuers interested in joining the US Risk Dynamics Study typically begin with one
year of participation. For more information, please contact Michael Grillo at (914)
307-3147 or
mgrillo@argusinformation.com
