A Comprehensive Guide To Bank Loyalty Programs : Best Features & Examples Included

by Deepak Nautiyal |

A Comprehensive Guide To Bank Loyalty Programs : Best Features & Examples Included

Bank Loyalty Program, or bank rewards program, enables banks to effectively reward and incentivize customers. As per a study, 81% of modern banking customers expect incentives either in form of bank loyalty programs or as signup bonuses. It clearly indicates the sheer essence of having a bank loyalty program in place for your customers to meet their expectations and boost retention. Let’s explore in detail how bank loyalty programs help drive customer loyalty and what all program features are best to consider for designing your own bank rewards program.

 What is a Bank Loyalty Program?

Let’s first understand what is a financial services loyalty program? A financial services loyalty program is a marketing strategy aimed at helping banks and other financial institutions to retain their customer base by offering them exciting rewards. A bank loyalty program thus refers to a financial services loyalty program designed to provide modern banks the competitive edge in customer retention.

Some of the best performing bank rewards programs offer higher interest on savings account, discount on loan, lower ATM usage fee etc., as rewards to attract customers. The perks mentioned may above appear extremely enticing for most banking customers; however, as long as you make the customers feel that they are deriving a great deal or some real monetary savings, they will naturally keep coming by participating in your bank rewards programs.

Top 3 Challenges for Banks & Financial Services in Terms of Customer Retention

Banks and financial services providers have to encounter several challenges when it comes to boosting customer retention. Following are some of the prominent challenges banks face –

Establishing an Influential Digital Presence

With competitor banks, FinTech already making solid presence on the digital forefront, banks have the challenge of keeping pace with the trends in digital transformation to ensure not lagging behind in this space.

Deploying Robust Customer Retention Tool/Plan

A customer retention tool/plan with the potential of incentivizing online customer interactions is essentially required for banks to keep their customers engaged. Banking customers easily get swayed by more enticing offers from competitor banks if the existing bank is incapable of presenting same via its offerings.

Incompetency to Design Relevant Loyalty Plans

Banking customers look for relevance and if same is missing in the bank’s offered loyalty program, they gradually lose interest. Banks and financial service providers thus have a major challenge of maintaining relevancy besides adding substantial value to the customers lives through their loyalty programs.

Loyalty Program Features for Banks & Financial Services

A high performing bank rewards program entails unique features to keep customers optimally engaged. Let’s consider some prominent features a bank loyalty program should essentially have to ensure high performance –

Perks Restricted to Specific Accounts

Only the active bank customers enrolled for the loyalty program would get access to the rewards available. Account upgrade or renewals can be encouraged via specific rewards only for these selective members.

Omnichannel Approach to Add Flexibility

Customers look for seamless experience and the Omnichannel approach brings that in perfectly by enabling them to earn & redeem rewards via all channels. Just bring in the touch of Omnichannel approach to your program to ensure a smooth experience for customers.

A Comprehensive Rewards Structure

Present diverse incentives including direct cash rewards, cashback, interest rate boosters, physical gifts etc. to amply entice customers. You need to build the rewards structure in a more comprehensive manner though in order to achieve this feat.

Timely Introduction of New Offers

Presenting new deals & offers on a timely basis for customers using a special offer management tool to have customers amply motivated to keep coming back. Motivated customers go a long way in staying with your bank rather than being swayed by competitors’ offers.

Rewards for Participation

You can devise opportunities to offer customers rewards for specific actions like online workshop participation, webinar watch, online game or quiz participation etc. The core focus should be on providing either rewards or one-time special benefits to eligible customers.

Special Member Benefits

If you can just provide some influential rewards to the loyalty program members such as priority lanes at the bank for swifter request handling, extra points on monthly newsletter signup, selective banking services available for free etc., this will help you build more repute from the customer’s perspective.

Elite Club

Creating an elite club within the program and making it available for the existing members for a specific reasonable fee will help you in two ways. Firstly, you can track the customers who are willing to shell out money for gaining a distinctive status in your program. Secondly, by filtering the loyalty program members pool to get the genuine VIPs, you will be providing the high-value rewards only to a selective mass.

 Top 4 Examples of Bank Loyalty Programs

A good number of customer loyalty programs are running successfully in the banking industry. Let’s take a closer look at some of the best bank loyalty programs available. After going through these examples, you may gain a better idea of  the crucial elements that actually make a bank rewards program a successful one –

Pay for A’s By Zion Bank

Pay for A’s is a unique loyalty program from Zion Bank aimed at incentivizing students in the age-group of 12-18 for achieving good grades. Zion Bank offers $1/50 cents per A/A+ grade for students with/without Zion Bank account.

The bank rewards program presents the perfect example of connecting with consumers in a more creative manner. It targets an upcoming generation of potential banking customers (students) encouraging them to open bank accounts with Zion Bank. The bank simultaneously also promotes its program & services to the students’ parents who become aware of same when their children benefit from the bank’s offerings.

Capital One Purchase Erasure

Capital One’s “Purchase Eraser” allows customers to earn points by erasing the already purchased travel. Customers simply initially need to make purchase using their credit card/mobile phone and then claim refund by submitting the purchase within 90 days for erasure.

CityBank’s thankyou

A special bank loyalty program from CityBank, “thankyou” aims at rewarding customers for making use of the bank’s network and services. Customers can earn points by using mobile apps, checking accounts, ATMs and other services and redeem same for travel, products etc.

Wells Fargo’s Relationship Discount

The Relationship Discount program from Wells Fargo provides a wealth of benefits like reduced rate of interest on student/car loans, zero ATM fee, safety deposit boxes discount, increased interest rate on account, bonus for having funds above a specific value  etc. to customers. This program indeed incentivizes customers quite effectively as being active with the bank helps them considerably save several services charges, thereby keeping them more engaged to go for maximized use of the bank’s services .

Design Your Bank Loyalty Program With Expert Assistance

Introducing a bank loyalty program definitely helps you boost customer retention as well as tackle the prominent challenges in financial services industry. So, why not have one designed & implemented for your bank? At Annex Cloud, we design & implement customer loyalty programs aimed at enabling banks & financial services firms foster improved customer retention. To know more about the bank loyalty solutions we offer, connect to our experts now!

[White Paper]
[White Paper]