Case Study
NORTHERN CARIBBEAN UNIVERSITY
DEPARTMENT OF BUSINESS ADMINISTRATION & HOSPITALITY
CASE STUDY
Featured in Partial Fulfilment of the Course
MGMT485 – Management Information Systems
BY
Tajay Quest - 18100702
What competitive strategy are the credit card companies pursuing? How do information systems support that strategy?
Credit card companies are pursuing a strategy which seeks to profile credit card users. This strategy studies the user’s purchase times and places, items the user usually buys and at what time they usually buy these items to get a pattern. When this pattern is broken then it’s obvious that some illegal use is taking place. All purchases are logged into a database maintained by the card issuer, and algorithms manipulate these logs to find irregularities in users’ purchases.
What are the business benefits of analyzing customer purchase data and constructing behavioral profiles?
When a card issuer analyzes a user’s purchase data and constructs behavioral profiles, the company gains a knowledge of who is good to do business with, from who is bad to do business with. In essence, the company knows who to trust with higher credit limits and who to cut back on. With this knowledge, the company will be able to loose less money to delinquent credit card holders and make more profit with those who are willing to pay their debt.
Are these practices by credit card companies ethical? Are they an invasion of privacy? Why or why not?
In my opinion, I think that these practices are ethical. Using a credit card is not using your own money. The money is being loaned to the user by a company who needs that money back in order to stay alive. In order to ensure that they get that money back, and people don’t just run off, they have to keep tabs on their users, to make sure that there are no misleading cases, and that their money comes back to them. Tracking the money use is not an invasion of privacy because for one, once a credit card is issued, the
DEPARTMENT OF BUSINESS ADMINISTRATION & HOSPITALITY
CASE STUDY
Featured in Partial Fulfilment of the Course
MGMT485 – Management Information Systems
BY
Tajay Quest - 18100702
What competitive strategy are the credit card companies pursuing? How do information systems support that strategy?
Credit card companies are pursuing a strategy which seeks to profile credit card users. This strategy studies the user’s purchase times and places, items the user usually buys and at what time they usually buy these items to get a pattern. When this pattern is broken then it’s obvious that some illegal use is taking place. All purchases are logged into a database maintained by the card issuer, and algorithms manipulate these logs to find irregularities in users’ purchases.
What are the business benefits of analyzing customer purchase data and constructing behavioral profiles?
When a card issuer analyzes a user’s purchase data and constructs behavioral profiles, the company gains a knowledge of who is good to do business with, from who is bad to do business with. In essence, the company knows who to trust with higher credit limits and who to cut back on. With this knowledge, the company will be able to loose less money to delinquent credit card holders and make more profit with those who are willing to pay their debt.
Are these practices by credit card companies ethical? Are they an invasion of privacy? Why or why not?
In my opinion, I think that these practices are ethical. Using a credit card is not using your own money. The money is being loaned to the user by a company who needs that money back in order to stay alive. In order to ensure that they get that money back, and people don’t just run off, they have to keep tabs on their users, to make sure that there are no misleading cases, and that their money comes back to them. Tracking the money use is not an invasion of privacy because for one, once a credit card is issued, the