In today’s competitive financial environment, community banks constantly seek ways to deepen relationships, grow revenue, and deliver higher value to their customers and markets. One strategic opportunity for achieving those goals is owning your credit card issuing program and portfolio.
While agent bank programs offer a simple way to provide credit cards, they come with limitations that restrict knowledge and control of your customers, limit revenue potential, and create a fragmented service experience. Owning your issuing program allows your bank to take control of customer relationships, deliver personalized service, and unlock stronger financial performance.
Understanding the Agent Bank Model
Agent bank referral programs allow community banks to offer branded credit cards while a third-party financial institution handles issuance, underwriting, servicing, and compliance.
This model can provide some initial benefits. It reduces operational complexity, avoids the need for dedicated infrastructure, and enables faster market entry. However, these advantages come with critical trade-offs.
Community banks only receive a small share of the revenue generated by the agent card program. The third-party issuer markets to your customers and retains control of the customer relationship, which can make it difficult for your team to provide meaningful support. Often, your staff cannot access customer account information, forcing your customers to seek help outside your bank. Limited access to data also makes it hard to analyze spending behaviors or tailor offers that match customer needs. The agent bank provider, however, can see everything your customers are doing with their credit cards.
Over time, these gaps can weaken the customer relationships that community banks work hard to build.
Understanding the Ownership Model
When your bank owns its credit card portfolio, it controls the entire program. Your institution has access to underwriting, retains the customer relationship, and benefits directly from the performance of the portfolio.
This model requires more involvement but does not require additional investments in infrastructure or employees. Moreover, the benefits are substantial. Banks that own their issuing programs can see a return on assets up to six percent, which is significantly higher than the industry average across other banking products. Ownership also allows your staff to support customers directly in a branch, creating a seamless and personal experience across every product line.
With full access to customer data, your institution can manage credit risk, identify trends, and create marketing strategies that reflect customer preferences. Your team would have access to products with customer-friendly terms that address market needs through consumer cards, small business cards, or commercial cards.
In addition to stronger performance, owning your issuing program helps preserve the integrity of your brand and reinforces the trust you built with your community.
Modern Solutions for a Traditional Challenge
Historically, community banks avoided owning their credit card portfolios due to the perceived complexity involved. Building the systems, managing compliance, and handling risk internally once required significant time and resources.
CorServ’s innovative program makes credit card ownership easy for banks. CorServ offers a turnkey credit card issuing solution that supports banks from implementation to management. Our approach includes quick implementation timelines, modern and flexible platform capabilities, and end-to-end program management. Your institution gains the advantages of ownership while relying on a proven partner for compliance, operations, fraud management, and technology integration.
CorServ’s solution provides extensive capabilities for commercial card issuing programs, like spend controls, virtual cards, and custom rebates, which help your institution serve the growing needs of large businesses. With commercial card usage on the rise, the ability to offer tailored options is becoming increasingly important for community banks focused on relationship-based services to companies.
Strategic Considerations for Bank Leaders
When evaluating whether to own or outsource your credit card program, consider the following:
- Are we receiving the full financial benefits of our current credit card program?
- Can we provide the level of service our customers expect to meet their card needs?
- Do we have access to the necessary data required to make informed decisions?
- Is our credit card offering aligned with our brand and relationship-based strategy?
- Do we have enough control over marketing to grow substantially with our credit card offering?
These questions reflect strategic decisions that influence customer loyalty, brand integrity, and your institution’s ability to grow and compete effectively in today’s financial landscape.
Takeaway
Owning your credit card portfolio allows your bank to provide better service, strengthen customer loyalty, and generate stronger financial results. It puts you back in control of a key product and ensures that every interaction reinforces your role as a trusted financial partner.
With modern solutions offered by CorServ, community banks can own and operate their credit card programs without taking on the burden alone. Quick implementation, comprehensive capabilities, and full program management make it easier than ever to take this strategic step.
To learn more about how CorServ can help your institution implement a successful credit card program, visit CorServSolutions.com.
