More than 70 per cent of customers pick their bank according to the loyalty programs they offer. However, only 13 per cent of banks actually hyper-personalise their loyalty programmes to meet their customer needs. That is according to experts who were speaking at the Banking, Innovation and Technology (BIT) event organized by Khaleej Times on Wednesday.

Priyanka Lakhani from the group Collinson explained that banks need to innovate faster to cater to their customers’ needs. “Loyalty programmes should sit at the heart of brands providing differentiation, value and relevance,” she said. “They should go above and beyond to provide meaningful and value-added engagement throughout the customer lifetime.”

The two-day BIT event explored how innovations like blockchain, Web3 and artificial intelligence are impacting the banking sector.

According to Lakhani, a lot of loyalty programmes are designed without keeping the brand in mind. “A lot of brands approach us to design a loyalty programme, the conversation is about tiers and points,” she said. “Very rarely is the conversation about what the brand stands for and how the loyalty program should reflect that.”

Using data

She said that although banks had data with them, they were not using it effectively to personalise their loyalty programs. She further clarified that such programmes don’t necessarily mean just points, cashback and redemption. To illustrate her point, she gave the example of an award-winning loyalty programme by international brand Raiffeisen Bank. “They looked at what was important to the customer,” she said. “We all know that sustainability is a big target for many people. So the bank measured the carbon footprint of everything the customer did. Wherever they spent money, the bank had a dashboard that showed their carbon footprint.”

She said the bank then used the data to cross sell and upsell. “With the way they hyper-personalised the data, they were able to get 25 per cent of their customers to sign up for certain bank services,” she said.

Credit cards

At a later panel, several speakers highlighted that loyalty was also a key factor when customers signed up for credit cards. “There could be maybe 15 rewards for a particular credit card,” said the moderator Girish Advani, chief strategy officer for Vernost. “However, it could be one that differentiates one credit card from a rival for the customer.”

Sethu Ramaswamy, co-founder and chief product officer at Ektar Technologies, said that banks could use loyalty programmes to set themselves apart. He gave the example of an old, successful campaign done by a local bank. “One bank had an offer that customers who took their credit card would get their names registered at a leading driving institute here,” he said. “It was a clever move because the bank addressed two pain points for the customer, and it was a very successful campaign.”

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