How banks are leveraging next-era loyalty technology solutions to engage their entire customer base

By Gaby Kool, President of Loylogic

With average global inflation expected to hit 7.5% by the end of 2022, business and consumer confidence has fallen by the steepest margin in a decade. From the pandemic to the international cost of living crisis, there has been little respite in recent years and both businesses and individuals are feeling the pressure.

For incumbent retail banks, these major economic events have taken place against a backdrop of increasing competition with the emergence of an unprecedented number of neobanks and investor-backed digital fintechs seeking to carve out market share. .

What does that mean? All banks, and in particular the incumbents, must fight harder to attract and retain their customers. But competition is not a bad thing. This pressure is forcing banks to innovate and adapt, and it’s exciting to see how financial service providers of all types are expanding their digital capabilities and focusing on a more holistic customer experience, going beyond the offering. traditional service.

And one of the ways they’re trying to win the battle for customers is through new-age, technology- and data-driven loyalty programs that break the mold.

Support and encourage financial well-being

Under current economic conditions, financial well-being has naturally become one of the top priorities for businesses and individuals seeking stability.

As a result, a range of new, innovative loyalty solutions have emerged that can enable banks to demonstrate a genuine understanding of their customers’ financial concerns and priorities, supporting and rewarding positive financial choices that suit their individual circumstances.

With data, banks can go beyond a one-size-fits-all approach and ensure that the rewards and incentives they offer will truly support and add value to the lives of their customers, regardless of their stage of development. life – whether they are studying, buying a home or planning for retirement.

This could involve offering accessible incentives to customers to encourage them to improve their credit score or pay their bills on time, for example. Or banks could allow members to earn rewards that support them with essential everyday purchases like groceries and mobile data.

Democratize rewards

Banks are also realizing the value of opening up loyalty programs to a wider audience. Where loyalty programs exist, they have often tended to cater only to the highest tier of customers, meaning many banks have missed a critical way to engage and support a wider customer base.

But some traditional programs have lost their impact, and banks need to create an offering that meets the needs and preferences of individual customers. This means moving away from a focus only on top-tier customers and instead focusing on rewarding unrewarded or under-rewarded people.

By democratizing rewards with customizable programs, banks can not only drive loyalty, but also drive new customer acquisition. In less mature markets like Africa – where 57% of the population does not have a traditional bank account – loyalty programs can be an effective way to attract the unbanked into the market.

African Bank, for example, recently launched a new loyalty program built around its ambition to provide sustainable, accessible and inclusive financial services to all South Africans. The bespoke program has been created to work for all bank customers and will allow members to earn and redeem loyalty points with a network of partners – covering such daily purchases, as well as exclusive aspirational rewards – as well as encourage positive financial behavior.

Secure the meeting room

Banks increasingly understand how loyalty programs can not only help with retention and acquisition, but also be a key tool to support a broader business strategy. And, using the latest loyalty technologies, banks are accurately measuring these programs, elevating loyalty from a marketing initiative to a vital tool that can be understood by the board of directors.

As the outlook for the global economy remains uncertain, banks still need to protect their customers against growing competition. To do this, banks’ service offerings must reflect the fact that all customers are valuable and can play an active role in supporting their financial well-being. By using loyalty technology to gain a deeper understanding of their customers and add value to their lives, banks can strengthen their relationships and stay ahead of the pack.