The Right Approach for Building Customer Loyalty in Digital Banking

bank rewards program

February 1, 2022

Reading time about 6 minutes

Banks have always been finding out the right ways to engage customers. Though with the advancing technology and uplifting strategies, everything needs alterations & fixes. Loyalty is the way to increase customer engagement and that’s the reason why we do need a loyalty program to stay by.

While talking about banking loyalty, there’s not much innovation around and probably that’s why most banks lack on bringing customers on board. Though digital has always been the trend to keep in focus, after the outburst of the pandemic it’s more than just a choice. With the rising digital disruption in financial services, it’s easier for customers to slip away. If the financial industry does not invest in bank loyalty programs, there’s hardly a scope to get in the race and pave a way.

Convinced enough to have a loyalty program work for you? Let’s find out more about having customer loyalty management software for banking and get you a fair understanding of what boosts modern banking customer loyalty.

 

Why’s Loyalty an aspect to focus on?

When the race is all about bringing customers to stick to a brand, consider loyalty at the top of the game. Through customer loyalty, a business can expect better returns and higher retention value rather than other marketing options including online & offline traditional marketing techniques and strategies. With the fintech innovations, customers do have a choice to explore and find the right solutions for making purchases and earning points on spending.

 

Ways to Increase Loyalty in Digital Banking

Customer loyalty in banking is a critical aspect and leading financial institutions are mostly implementing customer loyalty management software in banking. Here’s a list of the best practices to be followed for increasing loyalty-

  • Make use of Mobile Wallets for Loyalty Card Management

Mobile wallets are gaining visible popularity among consumers for being a convenient and secure way for conducting transactions of all kinds. Being a handy option to save money securely, marketers have an exciting opportunity for increasing brand loyalty. The option to manage loyalty programs with the help of a digital wallet is a great feature that can simplify user experience and increase loyalty as well. A successful example of the same is DBS Bank Singapore and its mobile wallet DBS PayLah!, being the fastest growing digital wallet having more than 785,000 users and 15,000 P2P transactions per day. Implementing a mobile wallet with a loyalty program is one of the best methods for boosting customer loyalty as it encourages customers to open a new deposit account online and transfer money through a QR code scan in real-time.

  • Personalized Experience to Digital Banking

It’s the era of personalization and the future of loyalty in banking relies on providing customers with a personalized experience. Customers require an approach wherein they can get offers and shopping suggestions based on their regular purchasing habits and patterns. An example of great banking experience personalization is a unique step taken by S&T Bank, wherein the bank has created a personalized My Rewards program for their debit card users. This system offers personalized reward cards based on customers’ regular shopping patterns, it also shows their favorite stores with a complete range of in-store and online offers and discounts. The entire process of personalization considers constant interaction and saving customer preferences for increasing retention in the long term.

  • Retaining and Onboarding Gen Z

The younger generation today is more tech-savvy than the older ones and that’s the reason why we should cater to them in the long run. No matter what industry is being targeted, a brand can significantly lose customers if they are not updating their traditional approach to better innovations satisfying the requirements of Generation Z, and of course, the banking industry is not far behind in the race. A leading example of such a scenario is A’s Program created by Zions Bank. It is created for rewarding students who are studious and bright and support education. It also aimed at student engagement and motivation for making use of financial services in the future. A’s program is much efficient and effective wherein it allows students to earn one dollar for each A on a student report card that is deposited right into a deposit account at this bank.

  • Incorporating a Banking CRM System

CRM is a boon for any industry, implementing the same in banking can help the banks in running a smart & personalized reward program based on efficient segmentation of customers. It allows keeping a smart customer database in a single place and efficiently managing contacts of various customer groups. The major advantage of using a CRM is to precisely target audience segmentation according to the income and demographical data, customer preferences, and behavior patterns. Having an accumulated set of data helps in identifying and targeting the most profitable customers and determining the loopholes in an existing or running loyalty program.

  • Introduce the fun factor with Gaming

Many brands have already switched to this model. gamification is a part of mobile apps and websites as a major tool of customer engagement and loyalty. Through implementing gamification elements in the customer loyalty programs, one can boost the popularity of the same amongst the targeted set of audiences.

  • Omnichannel Loyalty Programs for Customers

As a brand, it’s important to engage customers in multiple ways and for this purpose, omnichannel loyalty programs are the best solution. You can provide the banking customers with an omnichannel view of their digital banking operations and regular transactions. It’s a great idea to let the customers set up an automatic redemption towards deposit accounts, credit lines, and gift cards as well.

Final Thoughts

Traditional customer retention techniques are no more the trend to focus on, the swiftly moving banking system needs an advanced way to stay in line. Incorporating innovative practices and the leading technology advancements will surely lead to brand success. Hope the above-listed ways to increase customer loyalty can prove a benefit in facing the challenges and building strong customer loyalty for the banking industry.

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