Jennifer Piepszak, CEO of Chase Card Services, sat down with Business Insider’s Sara Silverstein to discuss the credit card business and how it is changing. She also talks about her path to CEO of Chase Cards after nearly 25 years at JPMorgan Chase. Following is a transcript of the video.

Sara Silverstein: So what are you most excited about for the future of Chase Cards?

Jennifer Piepszak: Well, there’s lots of things I’m excited about. In fact this year, we just launched nine new products. So I’m super excited to watch those grow and then we have a number of different digital innovations on the horizon to just make our customer experience better and better.

Silverstein:And what end of the range are the new products that you launch this year? Are they at the high-end like Sapphire Reserve, or are they on the more everyday products?

Piepszak:The majority of them were within our co-brand portfolio and they ranged across our co-brand portfolio. So we did a new United card, just last week, a new Southwest card, we did Aer Lingus, as an example. And so, and then we also announced a new Ink Business Card as well. So one in the branded side for small business, the rest on the partner side.

Silverstein:And how do you pick partners for Chase Cards?

Piepszak:Oh, that is a great question. We actually are the number one co-brand portfolio in theUSand super proud of our partners and so, we think about a number of things. One is certainly the quality of the partner and we have, like I said, a tremendous portfolio in terms of quality of names that we have. We also think about scale of the distribution. So very often, when we at Chase partner with other businesses, it’s often, for those businesses to bring their capabilities to our distribution. In the card business, it’s actually the other way around. So wewant tobe able to take advantage of our partner’s distribution with our credit card products.

Silverstein:And when you think about how consumers choose cards, what do you think makes them choose one card over another?

Piepszak:Yeah, it’s a great questionbecausewe’re often asked about our partner business versus our branded business. And so for us, it’s about customer choice. In other asset classes, like mortgage,for example, people typically have one mortgage. They may have a home equity loan, but they typically have one mortgage. Orinauto, they have one auto loan. With credit cards, people have fourorfive cards in their wallet. And they’re typically quite deliberate about how they fill their wallet. So a customer may be interested in a cash back value proposition, they may be interested in a travel and entertainment value proposition, like in Sapphire, or they may have an affinity for a brand, and that may be a hotel, it may be an airline, or in our case, a retailer like Amazon.

Silverstein:And what are you seeing in fraud, and in trends, like in 2018, what fraud should I be worried about as a credit card user?

Piepszak:Right, generally speaking- well,first of all, fraud is something that we will always, always have to be dealing with. And it’s a little bit like Whac-A-Mole in the sense that if you shut it down in one place, it appears in another. And so what we’ve seen, broadly speaking, in terms of a trend, is as we’ve introduced the new chip cards, as you may know with your own cards, that has dramatically reducedpoint-of-salefraud, physicalpoint-of-salefraud, and counterfeit fraud, because those chips are very, very difficult to replicate. And now, we see fraud in the e-commerce space.

Silverstein:And is fraud generally up or down across the board?

Piepszak:I would say it has shifted dramatically, and then on average, it is down,but will always be elevated.

Silverstein:And what’s the state of credit in theUS, and where is that going?

Piepszak:So, we feel really good about the state of theUSconsumer. Right now, balance sheets are very strong, the job market is very strong, absolute levels of debt are increasing, but as a percentage of household income and we call that the”debt service burden”of aUShousehold, that is still very manageable. So we feel great about where theUSconsumer is right now from a credit perspective. It’s critically important for us, given the size of our portfolio that we manage this on a surgical basis. And so, of course,there’s always gonna be pockets that we’re looking at and pulling back from, but generally speaking, feel very good about theUSconsumer.

Silverstein:And in the second quarter results, JPMorgan announced a charge of$330 million based on people redeeming faster than anticipated. Are credit card users getting more efficient and smarter? Is this gonna be an ongoing trend?

Piepszak:I think so. I mean, it’s a secular shift in terms of the value proposition of credit cards being about the rewards. And so I think customers are just much more aware of the rewards that are available to them. And therefore, using them more. For us, it’s not about the cost of the points, it’s about the increase in redemptions. And so for us, that tells us that we have a more engaged customer. And so while a $300 million charge is what it is, to us, there’s a very good news story in terms of the engagement that we’re seeing from our customers. Sapphire Reserve is a great example where we’ve seen lower attrition than we had anticipated, and higher engagement than we had anticipated.

Silverstein:And in the area of Sapphire Reserve, cards that, like those very high-end cards, is that a profitable venture and does it matter if it is?

Piepszak:It is a profitable venture. The way we have to look at it is at the portfolio level. And so, with Sapphire Reserve, that’s one example where you have a de novo product launch that actually takes years for us to really understand the returns associated with that product. But certainly, they are and can be very profitable. Importantly, what Sapphire Reserve has showed us, is like I said, very low attrition, very high engagement. And actually,brand equity. That is really hard to quantify. We have an entire Sapphire portfolio outside of Sapphire Reserve. We have Sapphire Preferred, and then a no-fee product. And both of those, we’ve seen lift just in terms of the brand equity that Sapphire Reserve has created. And then of course for us, at JPMorgan Chase, these customers are incredibly valued to the-valuable to the broader franchise. And so we really think about it from that perspective as we think about the potential for the profitability.

Silverstein: And you’ve been at JPMorgan Chase in one form or another for 20 years.

Piepszak:Close to 25, yeah.

Silverstein: Oh wow!


Silverstein:For 25 years, how did you get into the position that you’re in and did you ever envision being in this spot 25 years ago, on day one?

Piepszak:Yeah, I certainly didn’t envision being in this spot25 years ago.I was in the finance area, actually within the investment bank, for a very long time, about 17 years. And then I moved over to what was then retail financial services, as the controller, and then ultimately, became the CFO for the mortgage business and then was asked if I was interested in doing something completely different, which is a testament to our company and the risk we’re willing to take with talent. And so, I was asked to do something completely different and ran business banking for a few years. And then, about a year and a half ago, moved into cards. So definitely, never saw it coming. But it’s been a fantastic journey, and I’ve never been happier, truly.

Silverstein:So what advice do you have for someone who’s starting out in a job, who wants to be able to envision themselves in a role like this?

Piepszak:Yeah, well, I think it’s really important, just work hard. That’s a big key to success. Intellectual curiosity, I think that’s really, really important for people to always be learning, always anticipating the next question. And then I think being a great partner, being someone that’s a great problem solver, that people want in the room when they’re working on a project, or working to solve a problem. And that means not only having that intellectual curiosity, and being willing to work hard, but it means having heart, and humanity, and being your authentic self. So, I think all of that is really important for success.

Silverstein:And any big lessons, like biggest mistakes that you’ve made in your career? Or biggest successes?

Piepszak:Well, I would say, certainly if I could speak to my younger self, I would say, first of all, Thomas Jefferson said it, and he said it best, which is, “Believeyou can and you’re halfway there.”And so, particularly for women, I think it’s so important that we remain super confident in what we’re doing and know that like, we were made for this and we got this. And then still to have the humility to know that we can ask for help, and should ask for help. I ask for help more now than I ever have before. And then, to know, to have the humility to know it’s okay to have a bad day. Andwe’ve got tokeep moving on from that. Surrounding yourself with great people, both personally and professionally. I’m a mom of three boys, and so if I didn’t have the amazing husband I have, I could never do what I do at work. And so that’s, you know, critically important. And then life begins at the edge of your comfort zone. I mean, I think for years in the beginning of my career, I avoided being uncomfortable and then when you realize, you allow yourself to be uncomfortable, you grow through those experiences. And it’s incredibly rewarding.

Silverstein:And you’ve been at JPMorgan for all of Jamie Dimon’s tenure as CEO. Any lessons that you’ve learned from him, and what kind of boss is he?

Jamie Dimon

Piepszak:Well, he makes us all better. So he is just a tremendous leader. I think he shows us how to analyze things more deeply, to know your numbers, to understand your business cases, to make sure that you’re creating the time to be able to always be learning. And not just about our own industry, but about other industries that may be relevant. To always be focused on investing, and then culture, and how much culture matters. I would say we have a really smart, execution-oriented culture, but as Jamie says,”Sometimes it’s a lot more about heart than it is mind.”And so we have a smart, execution-oriented culture that has a lot of heartand a lot of humanity. And it’s not even just about Jamie. He has surrounded himself with the most talented operating committee, I think, on the planet. And each one of them is world class and so, it’s really about the entire leadership team that he’s created that makes us have such a strong culture.