For community banks and their customers, options are key. Just as no two communities are alike, no two community banks are the same, so we need the flexibility to create solutions that meet our customers’ needs.
That sentiment rings particularly true when we look at card programs. A bank’s individual risk tolerance, revenue goals, and operational and administrative capacity all factor into the kind of program administered. Do you want to assume complete control, risk management, and oversight of the program to maximize revenue potential, or do you want to share some of that responsibility and liability, and increase programmatic support? How you answer those questions plays a key role in the structure of your card program.
ICBA Payments options
That’s why ICBA Payments offers both a direct issuer and an agent card program. These models provide robust solutions designed to address a bank’s individualized program criteria:
Direct Issuer – In this model, you maintain complete control over your bank’s credit portfolio (including pricing, underwriting, and collections) and ICBA Payments helps you optimize the program with support that includes fraud loss protection coverage, client services, rewards program options, and turnkey marketing and risk management solutions.
Agent – With the agent model, you can provide personalized, branded cards while limiting your expenses and exposure to risk by working with TCM Bank, a limited-purpose credit card bank wholly owned by ICBA Payments.
Making the individualized choice
Neither scenario is right or wrong; they are just different sides of the same coin, designed to meet individual bank needs. And since those needs may change over time ICBA Payments offers the flexibility to scale your program up or down in line with your bank’s evolving goals.
My bank recently launched an internal review of our card program to assess whether we should shift from a direct issuer to an agent model with TCM Bank. We’ve begun a cost-benefit analysis, evaluating the growth potential that exists, weighing the longer-term vision against the shorter-term revenue goals of our bank. TCM’s reach and synergy in working with so many banks ensures the products offered are highly competitive, with strong rewards programs, and customer experience benefits to create an attractive product for our customers and potential customers.
In addition, we’re considering the benefits we may receive from the agent model when we reduce our compliance burden and credit risk by partnering with TCM. This change could help free up capital and provide added liquidity. It also creates opportunities for us to focus on competitive strengths instead of having so much emphasis on our card program’s risk and compliance.
But the beauty of it is that we have a choice. ICBA Payments ensures their card programs do not create a one-size-fits-all approach, and they are here to provide guidance on what might work for you. Their highly experienced staff has worked with thousands of community banks over the years, making them well positioned to help you make the right decision for your bank, so reach out with questions. Because while no two community banks are identical, the options they offer can work for all of us. Now it’s up to you to choose the best fit for your bank.
