Getting on Board with the Latest Banking Loyalty Trends

The popularity of loyalty programs throughout major industries made it a prime demand for the banking industry as well. Although loyalty in the banking sector is mostly delivered through credit card transactions, customers still anticipate diversity in the process of gaining and retaining points. The banking loyalty industry presents many opportunities that can be adopted to enhance banks’ presence and performance. 

Shifting from Card-based Loyalty programs to full relationship loyalty

In general, banking loyalty depends highly on credit cards, nevertheless, banks are slowly shifting towards full relationship loyalty programs. Within this innovative approach, banks tend to integrate all their banking services within the loyalty program such as credit cards, savings accounts, loans, and other transactions, thus making banking more rewarding for all customers. This shift enhances the bank’s relationship with customers and introduces personalized offers based on insights collected from customer data. 

Partnering with Technology Players - Fintechs

Although Fintech startups may pose a challenge in some banking areas such as money transfers however, when it comes to loyalty programs, banks can gain revenues through enhanced customer acquisition and lower cost of risk. Banks have marketing strategies, customer base, and financial expertise, however, they tend to be short of tactics that can support customer-based technologies and keep up with the ever-growing digital needs. Therefore, by partnering with fintech startups banks can rationalize their processes, gain revenues and better connect with their customers. For example, banks make a revenue of 0.5%-2% on transactions made on credit cards, thus constantly encourage customers to increase their use of credit cards, startups such as Pointcheckout support banks in this endeavor by offering flexibility in rewards redemption. The platform allows customers to use points they earned from any reward program for online purchases.  

Incorporating Blockchain Technology

The emerging blockchain technology with its decentralized, transparent and highly secure architecture could be a perfect solution for banks and other financial institutions. This technology helps banks increase the cost-effectiveness of various banking services including loyalty programs by running them more efficiently and securely. In some banks, blockchain technology was used to lower the amount of time needed to process the data of earned points, this scheme allows members to successfully redeem points at any point-of-sale (POS).

Personalized Experiences 

Banking loyalty and personalization are strongly connected, customers are looking to build a meaningful relationship with their banks. They appreciate banks that value their attitudes, behaviors, and expectations thus, they provide banks with all the information they need to optimize this relationship. Here lies a big responsibility on banks to obtain a 360 view of their customers 

In a world where consumer behavior and technology are driving commercial change the concept of loyalty in banking will be reinvented to a personal and pleasurable approach. For that reason, finding ways to consolidate these new trends will allow banks to sustain their presence in the future. Banks need to evolve into a customer-oriented approach that puts customers’ needs and interests as a priority in their loyalty strategies. As a result, they need to set up a loyalty system that rewards customers for their entire banking relationship.