ACG’s Payments Expectations Index Moves Higher on Improved Credit Metric
June 3, 2014
(New York, NY): The first quarter 2014 Payments Expectations Index moved sharply higher from its 2013 year end indication. The key driver for the improvement was the credit component of the Index, which indicates that the credit quality in the industry continues to improve. Card issuers have maintained the conservative underwriting posture that began during the fiscal crisis, and continues to reap the benefits. Auriemma Consulting Group (ACG) expects 2014 to be a year of strength for the Card Industry.
The PE Index, launched in February 2013, combines four key performance indicators – profitability, credit risk, consumer sentiment, and regulatory compliance – into one index designed to measure and forecast the outlook for the credit card industry.
Profitability, which is extremely robust, held steady from the prior period. Our consumer sentiment research, on the contrary, reflects a pessimistic view, having dropped now to a level only slightly better than 2012’s Q1. This is somewhat troubling, as the portion of consumers with serious worries about the future (including financial problems, less income, and job insecurity) has increased from last quarter. This could lead to greater restraint in future spending and borrowing, and we will watch this performance indicator closely.
The PE Index for Q1 2014 is now at 70.86, up from 63.08 at 2013 year end. We continue to see the card business as healthy and remain optimistic about the industry through the remainder of 2014.
About Auriemma Consulting Group and the PE Index
ACG is a boutique management consulting firm with specialized focus on the Payments and Lending space. We deliver actionable solutions and insights that add value to our clients’ business activities across a broad set of industry topics and disciplines.
Complementary to our core consulting business, ACG facilitates a series of Industry Roundtable groups focused on a variety of industries in which clients exchange information through activities managed by ACG, comparing and analyzing industry practices and benchmarks so that each member can optimize its own performance. Founded in 1984, ACG has grown from a one-man shop to a nearly 50-person firm with offices in New York and London.
The PE Index is based on ACG research and is informed by both public and proprietary data. For more information, please contact John Costa at (212) 323-7000 or firstname.lastname@example.org.