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Early Experience of Credit Card Profit Drivers: The Case of the U.S. Banking Industry
Ou, Chin S.
Profit driver;Credit card;Banking industry
|Issue Date:||2017-11-15 14:52:19 (UTC+8)|
Credit card business is important to the banking industry and banks are concerned with its improve profitability. Recent managerial accounting researches suggest that profit drivers are important factors for performance of credit card business. Profit drivers should be analyzed by considering both revenues and costs streams. However, it is not easy to collect the actual operating data, and thus little research has discussed the topic. This paper focuses the impacts of profit drivers on credit card profitability. Using U.S. banking data from 1980 to 1990, the paper examines the effects of intra-bank operational factors on credit card profit. The empirical results show that operational variables such as credit card scale, credit card intensity, dealer network complexity, and transaction intensity have significant impacts on credit card profit. Credit card scale and credit card business intensity are the major positive factors that influence profit level of credit card business. The findings suggest that banks should increase the number of accounts and the ratio of credit card revenue to operating revenue in order to effectively utilize credit card business resource and increase its profitability. As the global village is coming to place, early experiences in the U.S. credit card business can be informative for Taiwan banking industry.
|Relation:||會計評論, 38, 31-57|
|Appears in Collections:||[會計評論] 期刊論文|
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