Retail banks have been offering different reward programs for many years. However, things have changed. Customers don't recognize these programs as appropriate loyalty anymore. Banks should challenge the hegemony of the traditional system and find new ways to build customer loyalty.
With the digital disruption in financial services making it easy for customers to flee elsewhere, and with fintech startups hot on the heels of financial institutions, banks that don't invest in loyalty will lose the game.
Go digital to drive loyalty
Small banks are often afraid of being out-invested by big national banks. However, even regional banks can win the competition if they position themselves as fintech innovators. At the age of digital transformation, customers feel more loyal to banks that digitize financial services since it helps them save time and effort in many cases.
An excellent example of progressive banking digitization is Frost Bank, based in Texas. In 2000, it became the first regional bank that launched online banking. It offered its customers options that helped considerably improve banking experience and increase loyalty.
7 Practices to increase loyalty in digital banking
1. Use mobile wallets for loyalty card management
The possibility to manage loyalty programs directly from a digital wallet is a great feature that can significantly simplify user experience and increase loyalty even more. Capital One has become one of the first banks that have started incorporating this innovation in its system.
2. Personalize digital banking experience
A great instance of the banking experience personalization is an innovation provided by S&T Bank. This financial institution has created the My Reward program for its customers who often use debit cards. The system offers personalized reward cards designed according to particular online shopping preferences of users.
3. Attract and retain a younger audience, Generation Z
To mitigate the risk of losing these up-growing customers, Zions Bank has created the Pays for A's program to reward students who have been particularly diligent in their studies and support education.
4. Incorporate a banking CRM system
CRM systems enable banks to run smart and highly-personalized reward programs based on the efficient segmentation of customers. CRMs allow keeping a whole customer database in one place and easily manage contacts of different customer groups.
5. Provide the omnichannel view of loyalty programs
Customers will like it if you provide the omnichannel view of their digital banking experiences. Let them track their reward points on various devices, from mobile phones to tablets and desktop computers.
6. Gamify loyalty programs
Gamification is often used in mobile apps and websites as a tool for customer engagement and loyalty. By applying gamification elements in customer loyalty programs, you can significantly boost the popularity of these programs among your target audience.
7. Use digital customer onboarding
Customer onboarding is an excellent opportunity to show customers that a bank cares about them. You can create a feature of online assistance in your mobile banking app that helps users start using new financial products and services.
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