Interactive Session
Interactive Session #5 Organizations
Article: HOW MUCH DO CREDIT CARD COMPANIES KNOW ABOUT YOU?
Page 100
Management Information Systems “Managing the Digital Firm”
Kenneth C. Laudon / Jane P. Laudon
Case Study Questions
CSQ #1:
What competitive strategy are the credit card companies pursuing?
Credit card companies nowadays are pursuing what they so called the credit card profiling. Every time they make a purchase using their credit card, a record of that sale is logged into massive data repository maintained by the card issuer. Each purchase has its own four-digit category code that describe the type of purchase that was made, these codes allow credit card companies to learn a great deal about each of its customer. Another credit card companies are now focusing on mining credit card data and also credit card companies are developing more fined-grained profiles. How do information systems support that strategy?
Information systems support the credit card profiling strategy by using the data that credit card companies already collected and recorded for multiple purposes. First they use them to target future promotions for additional products more accurately. Second, the data help card issuers’ guard against credit card fraud by identifying purchases that appear unusual compared to a cardholder’s normal purchase history. The credit companies also flag users who frequently charge more than their credit limit. Lastly, these records are used by law enforcement agencies to track down criminals.
CSQ #2:
What are the business benefits of analyzing customer purchase data and constructing behavioural profiles?
First, it helps them to predict cardholders posing the highest risk. Also it helps them get inside the heads of their customer. Third, the data provide new insights about the relationship of certain types of purchases to a customer’s ability or inability to pay off credit card balances and other debt. To deny credit card applications or shrink the amount of
Article: HOW MUCH DO CREDIT CARD COMPANIES KNOW ABOUT YOU?
Page 100
Management Information Systems “Managing the Digital Firm”
Kenneth C. Laudon / Jane P. Laudon
Case Study Questions
CSQ #1:
What competitive strategy are the credit card companies pursuing?
Credit card companies nowadays are pursuing what they so called the credit card profiling. Every time they make a purchase using their credit card, a record of that sale is logged into massive data repository maintained by the card issuer. Each purchase has its own four-digit category code that describe the type of purchase that was made, these codes allow credit card companies to learn a great deal about each of its customer. Another credit card companies are now focusing on mining credit card data and also credit card companies are developing more fined-grained profiles. How do information systems support that strategy?
Information systems support the credit card profiling strategy by using the data that credit card companies already collected and recorded for multiple purposes. First they use them to target future promotions for additional products more accurately. Second, the data help card issuers’ guard against credit card fraud by identifying purchases that appear unusual compared to a cardholder’s normal purchase history. The credit companies also flag users who frequently charge more than their credit limit. Lastly, these records are used by law enforcement agencies to track down criminals.
CSQ #2:
What are the business benefits of analyzing customer purchase data and constructing behavioural profiles?
First, it helps them to predict cardholders posing the highest risk. Also it helps them get inside the heads of their customer. Third, the data provide new insights about the relationship of certain types of purchases to a customer’s ability or inability to pay off credit card balances and other debt. To deny credit card applications or shrink the amount of