Role of Bank Credit Card for Improving Customer Loyalty - Case Study Analysis

This report examines the role of bank credit card in managing customer loyalty with a case study of OCBC bank. It includes literature review, data analysis, and recommendations for improving bank services.

Integrated CASE STUDY
ANALYSIS

TABLE OF CONTENT
EXECUTIVE SUMMARY.............................................................................................................4
TOPIC: ROLE OF BANK CREDIT CARD FOR IMPROVING CUSTOMER LOYALTY........5
INTRODUCTION...........................................................................................................................5
Aim:.............................................................................................................................................5
Objectives:...................................................................................................................................5
Research question:.......................................................................................................................5
Statement of problem:..................................................................................................................5
Structure of the report:.................................................................................................................6
CHAPTER THREE: LITERATURE REVIEW..............................................................................6
Problem statement, plan of analysis.............................................................................................6
RESEARCH METHODOLOGIES.................................................................................................6
Research type: .............................................................................................................................6
Research approach:......................................................................................................................6
Data collection:............................................................................................................................6
Data analysis:...............................................................................................................................7
LITERATURE REVIEW................................................................................................................7
Theme 1: Understanding the bank credit card business model concept......................................7
Theme 2: Analysing the BCD role for improvising the consumer loyalty..................................7
Theme 3: Influence of efficient credit card services for better customer loyalty with bank.......8
CHAPTER FOUR: DATA ANALYSIS AND FINDINDS............................................................8
Theme 1: Bank credit card as business model in financial world:..............................................8
Theme 2: Benefits of bank credit card for managing customer loyalty:......................................9
Theme 3: Impact of bank credit card service over sustaining customer loyalty in OCBC bank
and its competitors:....................................................................................................................10
CHAPTER FIVE: RECOMMEDATION AND CONCLUSION.................................................10
Recommendation:......................................................................................................................11

REFERENCES................................................................................................................................1

EXECUTIVE SUMMARY
Bank credit card is one of the best financial service provided by the bank to the customer
allowing them to avail certain amount of credit to purchase product and service. This report has
focused on case study of OCBC bank and examined the role of bank credit card in managing
customer loyalty. Later focusing on aims and objectives, this report has discussed clear aims and
objectives including statement of problem and structure of the report. Continuing, literature
review is been considered where researcher have reviewed the published literature for getting
clear idea about the chosen topic. Considering different themes in literature review, researcher
has covered every important part of the topic and managed to examine whole case study for
better finding. Later data analysis is been performed in which researcher has analysed the data
collected with different techniques, resource, tools and methods, data analysis helped researcher
to examine impact on chosen topic on OCBC performance. At last recommendation and final
conclusion is been provided to examine what are the best recommendation to increase bank
service in financial world.

TOPIC: ROLE OF BANK CREDIT CARD FOR IMPROVING CUSTOMER
LOYALTY
INTRODUCTION
Credit card is one of the best financial service which allow customer to enjoy certain
benefit in financial and business world, credit card is bank service in which customer can take
credit from bank and spend on purchase of product and service (Lim and Parker, 2020). Holders
of credit cards can repay the credit with minimum interest rate, this card is consider powerful in
business world where owners are to manage their business with credit taken from bank under
credit card service.
Aim:
To investigate the role of bank credit cards in managing customer's loyalty. A case study
of OCBC bank.
Objectives:
 To investigate the concept of bank credit card business model.
 To examine the role of bank credit card for improving customer loyalty.
 To analyse the influence of effective credit card services over sustaining great customer
loyalty in OCBC bank.
 To recommend the best strategies to OCBC bank in order to manage customer
expectations and loyalty.
Research question:
1. What is the concept of band credit card business model?
2. What is the role of bank credit card for improving customer loyalty?
3. What is the influence of effective credit card services over sustaining great customer
loyalty in OCBC bank?
4. What are the best strategies to OCBC bank in order to manage customer expectations and
loyalty?
Statement of problem:
Credit cards are powerful instrument in the financial world which allow cardholder to
take certain amount of credit from bank, however, bank need to provide service to customer who
hold credit card. This financial service is beneficial for customer as well as bank but maintaining
credit card is challenging for bank as well as customer (Ibrahim, 2018).

Structure of the report:
 Chapter one: Introduction;
 Chapter two: methods, techniques and tools for analysis in the case.
 Chapter three: Literature review
 Chapter four: Data analysis and finding
 Chapter five: Conclusion and recommendation
CHAPTER THREE: LITERATURE REVIEW
Problem statement, plan of analysis
Consumer loyalty is one of the reason through which businesses concern, it helps in
maximising the revenues. Following study is based on OCBC bank which is currently facing
problem in their consumer loyalty. Where declination in number of card issue is clearly seen for
the firm, their consumer is shifting to their competitor firms.
RESEARCH METHODOLOGIES
Research type:
Research type consists of two strategies that are qualitative and quantitative research. In
qualitative where data consists of facts and non-numeric information while quantitative is
completely opposite where data involves the figures, numeric (Mulia, Usman and Parwanto,
2020). For this research study analyst have selected the qualitative study because of its maximum
flexibility as compared with quantitative.
Research approach:
It is the procedure that comprises of further stages of the broad assumption that discuss the
detailed aspects of data collection, interpretation. It involves two approach which are inductive
and deductive. In this inductive reasoning concern with formation of new theory while deductive
concern with existing theory where hypothesis found. Inductive reasoning is better for this study
as there is no such time limitation.
Data collection:
Data collection plays a crucial role in research where analyst aims to collects the data for
drawing better conclusion of report. It can be done in two ways which are primary and secondary
data collection. In primary source data is obtained from open communication, interviews,
surveys (Vinitha and Vasantha, 2018). While in secondary data is already present where data

sources are books and journals, internet websites. In this research secondary data is been selected
by analyst as it is time and cost convenient and helpful in completing the research rapidly.
Data analysis:
After collecting the data next procedure is to analyse the data to obtain useful information so
that it can be used in the study. It further divides in two strategies which are thematic and
statistical analysis. Thematic concern with the qualitative data, it is applier to the set of texts,
while in statistical it quantifies the quantitative data where statistical operation is being done on
data. For this study which is concerns with qualitative so thematic approach is appropriate also
there is no such requirement for setting the categories in advance.
LITERATURE REVIEW
Theme 1: Understanding the bank credit card business model concept
According to the view of Agrawal and et.al (2018) credit card refer to the credit facilities
that have been provide by the banks that enables the consumers to borrow the funds within the
approved fund limit of their credit card. Consumer can easily make purchase of goods and
services by using the card. This facility has reduced the frictions in the commerce by developing
the possibility to purchase first and pay later. On the basis of credit card business model, it states
that consumer having a credit card can easily move out without carrying any cash they just need
to use card for their payments. Where credit card association generally provides the platform for
the issue and utilisation of the card, where issuer is bank who approves the credit to consumer
and acquirer is the bank where merchant have an account. On the other hand, author Ullah and
et.al (2021) said that credit card has lots of disadvantages which are high interest rate, fraud risk
along with this there are other expenses as well which are annual fees, high fee for foreign
transactions and expenses for the cash withdrawal. It also encourages the impulsive and
unnecessary purchase.
Theme 2: Analysing the BCD role for improvising the consumer loyalty
As per the view of de Matos, Curth and dos Santos Garcia, (2020) It is found that paying
through the credit card is cheaper as compared with making payment through debit or cash. Most
of the credit card also consists of the lucrative welcome offering that lure the consumer to have
it, with this customer can easily withdraw the cash when they needed. Banks cannot run properly
or smoothly without loyal consumer thus they offer the credit facilities along with the best offers
so that they will also issue their credit card from banks. Rewards associated with the credits

comprises of clear convenience benefit which customer do not wants to miss it. Credit card
rewards and offers easily bridge the gap and ensures the better consumer loyalty. Thus many of
the platform that are designed for the merchant of any size allows credit card network to consider
numerous rewards partnership rapidly. On contrary with the above statement author Mihova and
Pavlov, (2018) said that availing the credit card consumer time as it takes more time in signing
up for the loyalty cards. Additionally, it also enhances the checkout time when the consumer
present and provide with buying information that is added to the card.
Theme 3: Influence of efficient credit card services for better customer loyalty with bank
From the view point of author Vilkaite-Vaitone and Skackauskiene, (2020) said that
having a better offers linked with the credit card it helps in providing the better consumer
experience which is required for the long term business opportunities. There are other services
through which the banking company concern with as they offer the CRM and inventory
management tools with the card and provided consumer with numerous options, in there offering
volume based discounts are also included as well online approval which simply make it easy for
signing up. Most of the businesses also provide the flexibility to their consumer where they
simply enable the consumer to install their application in their smart phone where they can easily
track their purchase and make payments. Overall it helps in winning the consumer loyalty which
is required for smooth running of the business. Author Özkan and et.al (2019) said that providing
better services for credit card to consumer encompasses the range of resources and time so that
suitable strategy can be form, in case of any failure in execution of strategy can result in huge
loss for the businesses. Therefore, it is important to move with proper strategy and planning to
get desired outcomes.
CHAPTER FOUR: DATA ANALYSIS AND FINDINDS
Theme 1: Bank credit card as business model in financial world:
Bank credit card is one of the best financial service in the business world, customer try to
avail credit from bank for the purchase of product and service. Bank and financial institution
consider this as business model which allow them to increase customer loyalty, every bank have
their own credit card service offer (ANG, CHEN and DARENDELI, 2022). Credit card is
powerful instrument in financial world, banks who have credit card service provide enjoy
continuous growth because there are certain benefit of this business model in financial world,
these are:

Annual fees: Banks who provide credit card service to customer try to charge annual fees and
charges in the name of maintenance, banks like OCBC generate revenue from fees collected
annually. Services of credit card are charged accordingly, but when customer open their account
in the credit card section then bank will automatically cut annual fees from the account. OCBC
consider this as effective business model in which they try to generate profit, depending on type
of credit service, OCBC bank charge fees accordingly.
Interest: Banks charge interest on loan or credit they provide, depending on amount, certain
interest rate are been set. Credit service is beneficial for customer but this is more beneficial for
bank because they can generate huge amount of profit from interest fees. However, OCBC bank
is powerful bank that keep interest rate according to the requirement. For example; depending on
credit amount, OCBC bank charge interest accordingly whereas depending on type of card,
interest rates are charged. Every bank have category of credit card, they generate profit from
interest rate.
Theme 2: Benefits of bank credit card for managing customer loyalty:
Every bank knows the importance of bank credit card to manage customer loyalty, it is
very clear that in financial world, loyalty is one of the most important thing. Bank craft certain
strategies to manage customer loyalty, providing extra benefit within credit card service is
considered as important strategy of every bank. However, credit card provide benefit to customer
according to their card type, OCBC have certain type of credit card which have different benefit,
maintaining customer loyalty is not complex process for OCBC bank. There are certain type of
credit card and their benefits, these are:
365 credit card: This is one of the most common type of credit card provided by the OCBC
bank to customer, this card includes certain benefit and rewards which allow bank to attract
customer. For example; 365 credit cards provide 6% cash back on food and beverage item, 3%
cashback on transportation and22.1% on savings on fuel (Foley and et.al., 2020). OCBC bank
have higher interest rate in these card which impacting their customer loyalty, this bank has to
reduce interest rate and need to add more benefit for managing customer loyalty.
NTUC plus! Credit card: This one of the most common but critical type of card which allow
customer to enjoy certain benefits, OCBC bank provide certain type of benefit to the customer
for managing their loyalty. For example; 7% cashback at FairPrice and Warehouse Club store,
20.3% saving on fuel depending, 3% rebate on popular store. This credit card is beneficial for

both bank and customer, OCBC bank have to add new benefits and rewards to this credit card
allowing them to manage customer loyalty.
Titanium reward Card: OCBC bank provide certain financial service to customer using this
card, including all basic service, OCBC bank add certain benefits, rewards and uplift for the
customer. Titanium card is beneficial for customer in terms of reward. For example; 50 reward
points for spending on shopping and online purchase, depending on amount of shopping and
different reward point on certain other purchase from this card. OCBC bank can manage
customer loyalty with this card but they need to add more financial service as well.
Theme 3: Impact of bank credit card service over sustaining customer loyalty in OCBC bank and
its competitors:
Bank credit card service is beneficial for both bank and customer, banks can enjoy
continuous growth and generation of surplus profit whereas customer enjoy credit service
including benefits, rewards and discount. Credit card business model is full of competitors,
almost every bank have service of credit card which allow them to maintain customer loyalty and
attract customer. It is very clear that bank credit card is financial service which is provided by
every bank, however, each bank have their own type of credit card.
Some banks provide better service than OCBC bank because they have more brand image
and reputation in the market. OCBC bank and its competitors including Farmers & Merchants
Bancorp, United Oversees bank, Hanmi Financial Corporation and DBS Bank (Foley and et.al.,
2020). Focusing on credit card landscape, this area of financial world is full of tough
competition, it will be challenging for OCBC bank to survive in the market and manage their
business accordingly. It is very clear that OCBC bank do not provide better financial service than
other banks, they need to improve their service to manage customer loyalty in process.
CHAPTER FIVE: RECOMMEDATION AND CONCLUSION
This report has discussed bank credit card and its importance in the financial world for
managing customer loyalty, credit cards are most beneficial instrument for both bank and
customer which allow them to credit certain amount for the purchase of product and service.
Later this report has discussed introduction including aims, objectives, statement of problem
structure of study, this area of study is important as this provides clear briefing for overall study.
Later this report has discussed literature review in which different authors and their viewpoint is

considered by the researcher, they crafted certain themes to cover the topic and to get better
result.
Literature review part is managed by the researcher to examine published literature, they
get enough knowledge and understanding from this part. Later this report has discussed data
analysis and finding allowing researcher to analyse the data collected, researcher has carefully
examined the case study and understand key point which needs to be included in the finding.
This chapter has examined three themes which allow researcher to consider each every important
element, this chapter play significant role in the study. At last this report has provided
recommendation to gaps occurred in the chosen topic and recommendation to company for
improving position in the market.
Recommendation:
OCBC bank is one of the most stable financial institution in Singapore market, this
company provide certain financial service which allow them to become competitive in the
market. OCBC bank is facing issue of high customer turnover, due to lack of customer loyalty, it
has become challenging for OCBC to reduce high customer turnover. There are certain
recommendation, these are:
Increase financial benefit: Every bank provide financial service to their customer including
certain benefit allowing them to manage customer loyalty. It is highly recommended for OCBC
bank to increase financial benefit for their credit cards, there are different type of credit card
available with OCBC bank, but they need to add more benefit as well. They do not have any
value proposition which keep them different from other financial service provider. However,
they can increase their customer loyalty when they will increase financial service and benefit,
credit card with completely new benefits and reward allow bank to generate surplus profit.
Increase financial service: It is highly recommended for every bank including OCBC to
increase financial service because after COVID-19 impact, businesses are demanding financial
help from bank, this is right opportunity to cover this market and enjoy continuous growth.
However, with basic financial service, bank can not fulfil the demand of customer that is why it
is important to increase financial service to manage customer loyalty. Banks like OCBC do not
have great impact on financial market, they need to bear high cost of introducing new service,
they have opportunity to introduce new credit card allowing them to increase list of powerful
credit card.

Lower interest rate: It is highly recommended for OBCB bank to reduce their interest rate to
attract customer, many banks fail to survive in the market because they keep interest rate similar
to those bank who is already well-established in the market. Low interest rate means more
customer, and business can maintain brand loyalty as well, it is very important to keep interest
rate low to win customer. Banks who charge lower than other bank make certain amount of
profit annually because they have more customer than regular bank, it is recommended to lower
the interest rate, clear hidden charges and describe annual fees carefully.

REFERENCES
Books and journals
Agrawal, D. and et.al 2018. Loyalty points on the blockchain. Business and Management
Studies. 4(3). pp.80-92.
ANG, M., CHEN, Y. and DARENDELI, S.P., 2022. Getting the next swipe: Improving
customer loyalty for OCBC bank credit cards.
de Matos, C.A., Curth, M. and dos Santos Garcia, A., 2020. Customer loyalty in the online
context: Understanding trust in different parties. Journal of Electronic Commerce
Research. 21(4). pp.237-251.
Foley and et.al., 2020. The effects of information on credit market competition: Evidence from
credit cards. Available at SSRN 3550904.
Foley and et.al., 2020. The effects of information on credit market competition: Evidence from
credit cards. Available at SSRN 3550904.
Ibrahim, I., 2018. The Relationship Between Liquidity Risk and Bank Performance in Bank:
Oversea-Chinese Banking Corporation Limited, Bank in Singapore. Bank in Singapore
(December 16, 2018).
Lim, P. and Parker, A., 2020. Case Study: OCBC Bank Singapore. In Mentoring Millennials in
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Mihova, V. and Pavlov, V., 2018, October. A customer segmentation approach in commercial
banks. In AIP conference proceedings (Vol. 2025, No. 1, p. 030003). AIP Publishing
LLC.
Mulia, D., Usman, H. and Parwanto, N.B., 2020. The role of customer intimacy in increasing
Islamic bank customer loyalty in using e-banking and m-banking. Journal of Islamic
Marketing. 12(6). pp.1097-1123.
Özkan, P. and et.al 2019. The effect of service quality and customer satisfaction on customer
loyalty: The mediation of perceived value of services, corporate image, and corporate
reputation. International Journal of Bank Marketing.
Ullah, M. and et.al 2021. Organizational antecedents and talent turnover: A relational analysis of
credit card departments of banks. Management Science Letters. 11(4). pp.1211-1220.
Vilkaite-Vaitone, N. and Skackauskiene, I., 2020. Service customer loyalty: An evaluation based
on loyalty factors. Sustainability. 12(6). p.2260.
Vinitha, K. and Vasantha, S., 2018. Usage of E-Payment and Customer Satisfaction. Executive
Editor. 9(3). p.130.
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