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An update to the MasterCard Advisors unit's PortfolioAnalytics tool could help issuers better analyze card-use patterns, MasterCard Worldwide says. The card company updated the tool to incorporate more detailed data. The earlier version only allowed analysis at a high level, but the updated version enables companies to look for patterns in specific subsets of transactions, such as cross-border payments, account ranges and the point of interaction. The tool update improves the way data are presented, such as by enabling users to view several PortfolioAnalytics reports at once on the same screen, MasterCard says. Adil Moussa, an analyst at Aite Group LLC of Boston, says such analytic tools are in high demand because they give issuers a clear view about how certain elements of their products, such as the fees or the geographies in which they are used, affect revenue. With cross-border transactions, "You want to see, in detail, what similarities are in all those cardholders that go abroad and their spending," and then determine how to encourage similar behavior in other customers to generate the same fees, Moussa says. The data also can show issuers which of their tactics should be shut down, he says. Issuers can see where they are "making the most money, or where … [they] are incurring the most losses," Moussa says. Before MasterCard added this level of detail to the analytics product, issuers might have been able to segment their data by card type but not go as deep as they might like, he says. Though the financial crisis has led to a heightened desire to cut costs, issuers use analytic tools in any economic climate, Moussa says. "They have always been in demand because you always want to tweak what you have and optimize returns," he says. Brian Riley, research director in the bank cards practice at TowerGroup, the Needham, Mass.-based independent research firm owned by MasterCard, says issuers' needs have changed as the economy has changed, and they need new analytic tools to adapt now that older models have proven themselves obsolete. An improved analytic tool such as MasterCard's "helps you adapt," though it also has lasting value because it can act as "a stepping stone for going back when things start normalizing" and "take in some of the learnings of the old environment," he says.
