A Conversation with Curt Hess, CEO of Barclaycard US

Navigator Edition: May 2016

Curt-Hess_-Barclaycard_We recently spoke with Curt Hess, CEO of Barclaycard US. In this Q&A format we discuss the Barclaycard US business, its partnership strategy, and fit within Barclays.

Curt Hess serves as Chief Executive Officer for Barclaycard US where he is responsible for the overall leadership and direction of the U.S. credit card business. Curt first joined Barclays in 2007 where he has held several executive leadership roles across the global business including the United Kingdom, Africa, Middle East and Western Europe. Most recently, Curt served as Chief Financial Officer (CFO) for Personal and Corporate Banking in London. He has also served as CEO and CFO for Barclays Europe Retail and Business Banking, CFO for Barclays Africa Retail and Business Banking and CFO for Barclaycard. Prior to joining Barclays, Curt spent the majority of his career at Citigroup and Bank of America, where he held a number of senior financial and business development roles.

Barclaycard US is one of the fastest-growing top-10 credit card issuers in the nation. The company creates customized, co-branded credit card programs for some of the nation’s most successful travel, entertainment, retail, affinity and financial institutions. The business also issues its own Barclaycard branded credit cards: Barclaycard Ring, Barclaycard Rewards, Barclaycard CashForward, and the award-winning Barclaycard Arrival product series. The company is headquartered in Wilmington, Delaware and has operations centers in Newark, Delaware; Wilton, Maine; Henderson, Nevada; and Hamilton, Ohio.

1. Can you give us a brief update on Barclaycard US, both in terms of your existing partnerships and appetite for growth via new programs?

For the past decade, Barclaycard US has been one of the fastest-growing top-10 credit card issuers in the nation. We’re currently the 9th largest issuer with more than $23 billion in outstandings (credit card loans). We are an integral part of Barclays’ strategy and a key area for growth. We have built strong and successful partnerships with some of the nation’s top travel, entertainment, retail, affinity and financial institutions, companies like Apple, L.L. Bean, Hawaiian Airlines, American Airlines and Ameriprise Financial. We also issue a suite of innovative and award-winning Barclaycard-branded credit cards. In addition, we have a retail deposits business under the Barclays brand (savings accounts and CDs) that recently surpassed $9.5 billion in consumer deposits. Since our inception in 2000, creating customized co-branded partnerships has been a core competency and at the heart of our business. We continue to actively seek opportunities to grow in the partnership space, as evidenced by the recent consumer launch and portfolio conversion with JetBlue.

2. Barclaycard US, unlike most issuers, is more of a “monoline” partnership player. What unique advantages comes with that model and how have you adapted to address areas such as access to deposits, the need for scale, etc.?

At the most fundamental level, co-branded partnerships are a core competency and at the heart of our business model. As such, we are actively looking for opportunities to grow in this space. We have differentiated ourselves in the marketplace by building highly customized programs to meet the unique needs of each partner. We view ourselves as an extension of our partners’ brands and we focus on delivering creative solutions to help grow their business, increase loyalty and enhance their brand. You can see this in the technology we develop, the processes we have and, more importantly, how our colleagues are focused on each partner’s unique needs and objectives. An example of this is our integration within Apple’s purchase path. We have evolved with Apple to ensure an on-going, seamless incorporation of the card with the rest of the Apple purchase process. We only integrate into a partner channel if we can enhance the overall customer experience with the partner. In addition, the launch of our online deposits business in 2012 (savings accounts and CDs), which now stands at more than $9.5 billion in deposits, has been an important component of our growth and diversification strategy.

3. How does Barclaycard US benefit from the broader Barclays franchise, both in cards and other areas such as digital, EMV learnings, etc.?

Being part of the global Barclays Group is a strong benefit to our business. We have 326 years of history as a leading bank and 50 years as a top credit card issuer and payments company to draw upon. Just think about the vast intellectual capital that is available for us to tap into on a daily basis. We also benefit from the great diversity Barclays has across businesses and geographies, particularly in the US and UK markets. EMV has been available in the UK market for 20 years. We’ve leveraged our UK teams’ experience and expertise to assist with the roll out of chip cards in the US during the past year. As a market leader in the UK, Barclaycard has been an innovator in contactless, mobile and digital technologies and solutions. These teams have provided insights and expertise in the development of our mobile and digital solutions. In fact, I’m proud to say that the learnings and assistance go both ways. We have strong collaboration globally as new products, services and technologies are being developed with an eye towards understanding how they could best fit in our unique and different partnerships, markets and geographies. We are constantly sharing our ideas for innovation with our partners, drawing on the best practices of our entire Barclays team and bringing new capabilities to our partners first.

4. Certain banks compete in the partnership space based on sector coverage, product set, etc. How does Barclaycard US filter new opportunities considering the diversity of your partnerships?

We’ve been fortunate to establish a track record of success across several sectors – travel, entertainment, retail, affinity, FI – and we want to continue to grow and expand in all of these areas. We’re naturally attracted to companies with strong brands, strong customer loyalty and robust distribution and marketing channels. It’s important that our corporate values are aligned and we share a common passion for keeping our mutual customers at the heart of our decision-making. We seek companies that view cards, payments and loyalty as core to their strategy. A successful formula involves senior leaders who are actively engaged with the co-brand program and can provide strategic support with a genuine appetite to grow the card portfolio. With shared values and aligned objectives, we have a long history of investing in the tools needed to differentiate and win in the market. We are highly integrated into our partner’s channels and those channels are diverse – branches, in-flight, purchase path, mobile, in-store, and others.

5. How are you thinking about the future of partnership programs with all of the activity in FinTech, rewards, etc.?

We are in a constant state of change when it comes to new technologies, products and solutions in the payment, loyalty and rewards space. This year we are investing significantly in our infrastructure and payment technologies to continue to stay ahead of the technology curve and speed-to-market. We will continue to evolve and adapt to meet the needs of our customers and partners. It’s an exciting time to be an important and meaningful part of this evolution, some may say revolution, we’re now seeing. However, I believe the keys to success in the co-branded space will remain as they’ve always been – two companies with similar values, trust, a winning attitude, and a shared commitment and passion to provide great products, services and experiences to consumers.

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