Continuous strategic innovation is only way forward for cards industry: American Express CEO

Citing the company's strategy of 'Channel Innovation', which has resulted in opening its doors and pursuing selective bank partnerships, Mr. Stokes emphasized the importance of fundamental change to address the growing intensity of competition in the cards market.

Addressing an audience of over 200 representatives from the banking industry
Mr. Stokes provided a wake-up call to any card issuer or bank partner who becomes complacent. "The fact that a company like American Express, which has been issuing cards since 1950 can revitalize itself and start seeking bank partnerships after following a closed loop model for decades shows how this business is changing," said Mr. Stokes.

"The whole of the Card business is under tremendous pressure to grow and gain market share as we move from a cash based society towards sophisticated and technology driven buying habits.

"The only way for Card issuers and banks to address this is to embrace continuous strategic innovation, which can often mean completely changing the way business has been conducted for years. To compete in this new environment, nothing is sacred and everything is open to change."

Mr. Stokes added that a good example of strategic innovation is the new American Express® Gold Credit Card with ID Keeper, which combines marketing and technology innovation. The ID Keeper Card provides security for online shopping where Cardmembers can store their favourite URLs, log-in, and other personal data.

Titled 'Reaching the Top of your Market', Mr Stokes' address also gave delegates an insight on the importance of customer segmentation, as well as the opportunity presented by e-commerce. He also ventured the opinion that the popularity of debit cards as a payment method will be short-lived.

"While Debit Cards are convenient, using them also means that funds exit consumer bank accounts earlier than they need to," explained Trevor Stokes. "As consumers begin to understand this more, we believe the popularity of Debit Cards will decrease leaving the way open for other payment solutions that retain funds in consumer bank accounts longer."

Cards Middle East 2006 is the region's flagship event for the payments industry. Held annually, the event provides a platform for exploring strategies that will expand Card penetration in the region.