Customizing loyalty: Banks already use AI to retain customers

The model that is seeing the greatest adoption across all sectors is "members-only discounts" (75%). These are cashback programmes where immediate rewards are offered on every purchase.

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According to a report by market research company, increasingly informed users are looking to make the most of their money, and banks are already taking steps towards customizing loyalty and integrating these programs into their service portfolio.

Encouraging long-term loyalty is easier with cashback

Why is loyalty so crucial to the success of a banking institution? Customer loyalty is a valuable and elusive asset. Loyal customers not only make repeated purchases but also become brand lovers and end up recommending products and services to their friends and family.

Moreover, retaining customers is much more profitable than acquiring new ones. Banks are well aware of this fact, as sector studies indicate that acquiring a new user can cost up to five times more than retaining an existing one.

Let us now look at what personalisation of loyalty is all about:

What fidelity in banking really means?

It’s not about attracting customers with discounts and promotions

There is often a misconception that can confuse us. While it is true that this system can be effective in attracting customers initially, loyalty goes much further. True loyalty is based on customer satisfaction and providing a hyper-personalized experience that adapts to their individual needs and preferences.

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Customizing loyalty as a strategy to drive loyalty

Thanks to artificial intelligence, banks can create deeper and more meaningful connections with people. Personalization can be achieved through a variety of methods, such as offering product recommendations based on the customer’s purchase history or providing exclusive offers and discounts tailored to their individual preferences.

Technological innovation and loyalty in the financial sector

This ring we speak of is the representation of the commitment acquired through cashback programs. Thanks to technological advances, institutions are harnessing the vast amounts of data their customers provide them.

This allows them to better understand their desires, preferences, and aspirations. By analyzing and enriching the information, they are able to offer unique and relevant experiences to their customers.

And how do they launch these experiences? Through their online banking.

Due to an unbeatable UX, banks, neobanks, and fintech companies deploy digital experiences adapted to each individual, offering hyper-personalized attention never before seen.

This is the next step in the loyalty universe: mobile apps powered by AI and machine learning.

The power of smartphones and digital channels

Now that –almost– everyone buys through their mobile devices, the opportunity to interact with users at a truly precise level is increasing. Samantha Sergeant, Global Propositions Manager, Customer Engagement & Media at dummhumby, makes it clear the value of digital platforms for companies:

Samantha Sergeant.
Global Propositions Manager, Customer Engagement & Media at dummhumby.

The ability to know in real-time the return on investment is obviously a very important aspect when implementing tools like cashback. The consultancy’s research also shows that multichannel shoppers spend 25% more than customers who only visit physical stores.

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How personalized loyalty programs work

These modules seamlessly integrate into the digital platforms of financial institutions and offer customers the opportunity to receive a percentage of their purchase as soon as the transaction is completed. Banks, neobanks, and fintech companies act as intermediaries and earn a commission from associated merchants by connecting them with users.

On the other hand, the end consumer needs platforms to offer as many merchants as possible, to be able to make all their purchases in one place. Regular and recurring expenses are the most interesting when it comes to saving!

Let us now look at what the future looks like for these rewards programs!

Banking customer experience: What’s on the horizon?

As we progress in financial innovation, personalized loyalty is expected to continue evolving and growing. Fintech companies continue to seek ways to hyper-personalize customer experience and offer rewards and exclusive benefits to banking users.

Artificial intelligence will continue to play a key role in this process, and institutions will be able to analyze, categorize, and enrich data more effectively. On the other hand, mobile applications are integrating predictive analytics to provide added value and continue to surprise consumers.

Looking for relevance has never been more important for the banking industry. By automating processes, banks can focus on what really matters: customizing loyalty. Improve their products and services to make them relevant to the people who buy them.

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