The firm is evaluating the re-entry of the Bank into the credit card issuing business.  A product matrix was developed to address 5 different segments of our market which are:  young adults at entry level credit limit, adults with higher credit limits, young affluent, affluent VIP, and business.

In general terms all products will be available through both Visa and MasterCard with an attractive introductory purchase and balance transfer rate offer and a variable go to rate based on the Prime Interest Rate.  All credit cards will also feature the new and improved loyalty program:  Beyond RewardsThe Beyond Rewards loyalty program will offer a full array of redemption options such as travel, gift cards, merchandise and cash back rewards.  

Furthermore it will provide state of the industry travel redemption and the ability to pool or gift points.  The Bank is expecting to outsource the processing/servicing to a third party provider.  However, it may retain certain processes in-house such as the underwriting and the collections.

Which operational and financial risks do you consider this new product brings to the Bank?