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Guru Speak > Mr Jared Young, Barclaycard US
Backgrounder: Credit Card IndustryFirst issued in the 1920s in the United States, the modern credit card is widely used today to avail formal short term loans and also to make safe, convenient and cashless payment transactions. Though about 85% of world payments are still made using cash and cheques, credit and debit cards have been one of the most preferred non-cash payments transactions, all over the world, having a 40% share in most markets.
However, the World Payments Report 2011 (WPR), prepared by Capgemini, The Royal Bank of Scotland, and Efma, say that the average value per card transaction is decreasing in most markets. The WPR report observes that “a drive for higher levels of transparency (in making service fees transparent to customers) is increasingly being seen in the payments industry overall and in the cards business in particular” to win back the customer’s trust. According to reports, the total number of credit cards in use in the US is about 1.5 billion (India has over 27 million credit card holders). In the matured markets like the US, where over 50% of all transactions are made using cards, the industry also witnesses increasingly strict regulations on payments. Interview with Mr Jared Young, Barclaycard USMr Jared Young, Barclaycard US
In this context, Barlclaycard US, the payments business of Barclays in the United States, sought to create a community to crowd source industry’s first credit card. It launched Barclaycard Ring (MasterCard) in March, 2012 as “the first social credit card to be designed and built through the power of community crowdsourcing”.
Going by its track record of democratizing the value creation process, Barclaycard Ring can easily be adjudged as one of the most genuine corporate efforts in the industry (leave alone, the financial sector), in crowd sourcing a product and co-creating an entire business. The community approach of Barclays has also helped the company to differentiate its card in the payments market which is increasingly becoming more commoditized. In this interview, Mr Jared Young, Senior Director of Consumer Markets, Barclaycard US, the payments business of Barclays in the United States, shares with us the reasons of taking a community approach to product development and how it helps BarclayCard deliver unique value to customers. Excerpts: "We Empower and Support our Employees to Follow their Passions"
Younomy: What were the key factors that inspired you to take a community and crowd source a credit card? Jared Young: There were three major reasons: one, the Government clearly wants the credit card industry to change its behaviour. The regulation on payments insist on bringing in more transparency, especially in the way credit card companies go about charging various types of service fees for consumers. Two, there is a need for credit card companies to win back customer’s trust. And, three, the advent of social media, which is enabling brands to build closer relationship with customers. Younomy: Considering the adoption of co-creation and social media, Ring represents credit card 2.0. What has had the most influence in your design: management 2.0 (democratization attitude) or web 2.0 (democratizing technology)?
Jared Young: First of all, it is not about technology or management per se. Rather, I would say that it is a cultural initiative - we want to give opportunity for card members to express their voice on how the card can best work for them. But Web 2.0 is surely a great enabler in this effort. Younomy: There is fair amount of democracy introduced in running your card business. You let the community define your late fee policy, for instance. What differences do democratization make to your product and service offerings?
Jared Young: The community created Ring is a simple card - our terms are simple and transparent. The card charges only a fixed Annual Percentage Rate, and there no other fees. We offer a low interest rate, and give the opportunity for members to shape and share in the product’s financial success. We provide card members the visibility into the card’s financial profit and loss statements. They can influence decisions that impact how the card is managed and serviced, and where the charity money should go. We are empowering our members to decide what card features and benefits are really best for them. Our community has a say in weighing economic trade-offs that can create a better card member experience. Younomy: What is the current size of your customer/community? How has been the response so far from the regulators and various sections of society for your community-driven business approach?
Jared Young: Currently we have about 6000 card members in our community. So far the response for our crowd-sourced approach from other government and other external stakeholders has been overwhelming. We just have to live up to their expectations. Younomy: What are the channels available for the customers to discuss and network with the company and other community members?
Jared Young: Customers can log into the community site and get all account related information. They can view and comment on blogs, create or join in discussions using discussion boards, and build relationships with other community members. We provide the card members all financial information related to the business performance. We use social media platforms such as Facebook effectively to help card members exchange ideas, share knowledge and provide direct feedback to us - this helps us determine future features of the product. Younomy: In order to build and nurture a community, you would need people with new skill sets such as community managers. What is the skills profile of your community team?
Jared Young: We hired a community manager, who comes from outside the industry, and have set up a dedicated team to respond to the needs of the community. Younomy: What lies ahead in your co-creation roadmap? Jared Young: We do not have any prescriptive road map. We would like to go by the needs of community members. We will continue to listen to them and introduce new features that they want us to build. |