The collapse of Silicon Valley Bank and Signature Bank and the last-minute rescue of Credit Suisse by UBS brought the banking industry into the global spotlight. The banking sector has been in a state of uncertainty after California regulators closed Silicon Valley Bank in the largest U.S. bank failure since the 2008 financial crisis. The Federal Reserve has delivered a small rate hike amid global banking tension.
There are many factors that could cause a bank to fail, including undercapitalization, liquidity, safety and soundness, and fraud. In the case of Silicon Valley Bank, when interest rates started sharply rising last year, and depositors demanded their deposits, the bank was forced to sell U.S. Treasury bonds at a loss. Amid this environment, it is more important than ever for banks to project an image of calm, stability, and transparency to their customers.
Since the invention of instant payment card issuance in the mid-2000s, it has quickly become a top priority for banks and credit unions as it provides convenience and a better experience for customers and members. We saw it become a top priority first through a dramatic increase in the use of instant issuance for getting chipped cards quickly into the hands of cardholders during the transition to EMV, and then through persistent availability of instantly issued cards through the COVID-19 pandemic via drive-up, drive-thru, and self-service terminals.
However, recent macroeconomic impacts in the retail banking sector have heightened consumers’ awareness of who they use as their primary banking institution, making it even more critical for financial institutions to differentiate themselves and prove their commitment to their clients and the broader community.
Instant card issuance allows cardholders to receive their debit or credit card from a local branch or interactive teller machine in minutes – the moment they open their account or are in need of a new card. These instantly issued cards are activated, personalized, and permanent. This quick and easy process can enhance the customer experience and improve customer loyalty, affinity, and likelihood to become a brand ambassador. By offering instant card issuance, banks and credit unions can demonstrate their commitment to their clients by providing a convenient and efficient service that meets their needs. This can help build trust and confidence in the institution, which is particularly important as consumers have more options for banking than ever before.
In addition to demonstrating commitment to cardholders, instant card issuance can also help banks compete with fintech startups and other financial institutions. These players are known for their agility and ability to quickly respond to customer needs, which has driven traditional banking models to leverage a unique differentiator: their physical footprint in the community. Instant card issuance allows financial institutions to offer a similar level of speed and convenience but through an in-person relationship-building event.
As we move through 2023, instant card issuance will become more important than ever before as banks and credit unions are looking to demonstrate their commitment to their community, differentiate themselves in a competitive market, and enhance the customer and member experience.
To learn more about how Entrust Instant Financial Issuance solutions can help your bank stand out, visit https://www.entrust.com/issuance-systems/instant/financial-card.