Discover 2015 Annual Report Download - page 6
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Direct Banking
In Direct Banking, Discover leverages its strong brand, leadership position in rewards,
superior customer experience and strong credit risk management capabilities. Our loyal
customer base is the foundation for growing credit card market share and for cross-selling
additional direct banking products.
We are committed to accelerating our loan growth in 2016. Underlying our growth initiatives
is our commitment to a disciplined credit management approach, which has served Discover
well through previous credit cycles. We expect the credit environment to continue to be
relatively benign in 2016, with a net charge-off rate in the low 2% range.
Card
Our Card business represents 80% of our loan portfolio. In 2015 we encountered several
headwinds to card loan growth, including lackluster U.S. consumer spending growth, driven
in part by lower gas prices. In addition, we sacrifi ced some growth to optimize profi tability
of balance transfer volume. Yet we still grew credit card loans by 3% by focusing on what is
most important to consumers: rewards, service and value.
Rewards: In 2015, we launched a program that doubles cash rewards for new Discover it
Cardmembers at the end of their fi rst year. Double rewards resulted in lower acquisition cost
per new account and customers are using their cards more, which should lead to increased
loan growth in 2016 and beyond.
Also in 2015, we off ered a promotional 10% Cashback Bonus on in-store purchases with
Apple Pay™, which drove adoption in our card base and also attracted new cardmembers.
In addition, we launched a Good Grades Reward Program for new student cardmembers,
and we continue to expand and enhance rewards redemption programs—including our
innovative “pay with cash back” functionality that lets customers easily pay their monthly
card bill using their Cashback Bonus. We will continue to develop rewards features and
benefi ts that drive customer satisfaction and long-term loyalty.
Service: Of the six largest U.S. card issuers, Discover is the only one with 100% U.S.-based
customer service representatives, and our industry-leading service is complemented by our
award-winning website and mobile capabilities. Our focus on the customer experience has
paid off . Discover ranked “Highest in Customer Satisfaction with Credit Card Companies,
Two Years in a Row” by J.D. Power.
Discover.com/company