February 2022

Why the Credit Card Industry Needs an Upgrade

Everyone loves an upgrade. And when you consider how quickly technology has advanced over the years, we could attribute a lot of that growth to our insatiable desire for the better, stronger, and faster. Whether it’s how we work, how we socialize, and even how we sleep, the fact that we are always seeking improvement tends to be reflected in the products that we’re drawn to.

With outdated software and practices, traditional credit card providers (and the credit industry in general) have largely neglected society’s need for innovation. That’s why Deserve exists: to power innovation and the future of credit using our modern and best-in-class credit card platform.

We are the upgrade the credit industry needs. Here’s why.

Promoting Equality and Inclusion

The traditional FICO credit scoring model, and the underwriting systems which utilize it, have been in place for decades, and under the leadership of big banks and legacy players in the credit industry, these systems have not undergone any significant transformation. And due to their archaic underwriting, they’re neglecting consumers who would make trustworthy cardholders. They need to promote inclusion by adopting more accurate and sophisticated methods for determining creditworthiness, but many legacy players simply don’t have the technology.

By upgrading to flexible underwriting methods to include the consideration of alternative data points, the credit card industry can gradually arrive at a much more efficient, and inclusive methodology. Learn more about alternative data and how Deserve’s underwriting engine has revolutionized underwriting in the credit card industry here.

Enabling Innovation

With incredibly limited capacity to customize offerings and exhaustingly long processes for bringing co-branded cards to market, legacy institutions have very little to offer potential business partners in this age of innovation. And yet, there has never been a better time for a business to launch a co-branded card. Customized rewards programs are in high demand, and Deserve’s own survey of 800 credit card users found that consumers were overwhelmingly enthusiastic about, and incentivized by, rewards that suited their increasingly modern lifestyles.

The technology of the past simply isn’t designed to build flexible, personalized rewards programs—period. However, with Deserve’s API-powered technology, businesses can launch fully customized credit products with modern rewards programs. Moreover, with digital-first, cloud-based solutions, we help partners tap into real-time insights about their customer base and implement critical changes to functionality whenever necessary to improve the user experience.

Strengthening Data and Card Security

Between the growing threat of cyber breaches, ransomware attacks, and an overall heightened concern among consumers about how businesses collect and use their personal information, strengthening data security is an upgrade that can benefit all industries. And as the California Consumer Privacy Act (CCPA) continues to evolve and its enforcement becomes more widespread, launching a credit card product without state-of-the-art security and compliance measures will simply no longer be an option.

In addition to emerging privacy regulations, the e-commerce boom from the pandemic has also facilitated a sharp rise in credit card fraud. As a result, many businesses are hesitant to take advantage of new online purchasing trends with their co-branded cards because data and payment security can seem like liabilities. And if they had to rely only on the assurances of legacy institutions to build their confidence, well, we wouldn’t blame them for choosing not to take the risk.

It doesn’t need to be this way. Innovative providers like Deserve have built industry-leading data security measures into their platforms from the outset of development. Going forward, all credit card providers will need to embrace the most up-to-date safeguards for data security on the market. Customer data needs to be better protected through tokenization to preemptively protect users’ private information, active monitoring of private information across all systems, automated responses to malicious access attempts for a fast and efficient response, and so much more. For example, Deserve has adopted a zero-trust security model, which calls for continuous verification and authentication methods to best protect against ransomware and cybersecurity threats. Zero-trust also means that we not only verify everything that’s coming in from the outside, but also everything within our systems. Systems themselves need to be exhaustively padded in threat response and device management tools to anticipate adverse events before they happen. And ultimately, as the regulatory environment takes shape, strengthening security will be an upgrade that even legacy institutions won’t be able to refuse.

The Future Is Digital

Credit cardholders want card providers to prioritize their needs now more than ever. In light of emerging preferences for mobile banking and online transactions—not to mention the functional limitations of physical cards—making credit products digital is the most viable way to satisfy consumers and enhance their experiences.

It’s time to rethink the modern credit card.