Making Banking Personal – 5 Ways to Build Successful Loyalty Programs

Loyalty Programs

Amit Patra - Senior Manager

As per the Salesforce report, 80% of the companies began the digital transformation; 14% made & sustained performance improvements & only 3% completed the change last year. Further, the report states that the average cost of failing to achieve digital transformation initiatives is around $9.5 million annually.

The past three years have brought about unprecedented economic instability, affecting businesses of all sizes and industries. Banks, in particular, face significant challenges as they navigate economic uncertainty and changing customer behaviors. The Pandemic has boosted the need for digital banking & made it easier for banks to increase the digital channels while closing the physical branches.

Digital banking has helped customers better manage their funds whenever and wherever they want without compromising safety. As a result, the latest report states that the number of digital banking users globally is likely to reach 3.6 billion by 2024. In fact, according to global online banking statistics, around 73% of customers use online banking platforms at least once every month.

Moreover, with increased digital banking, customer loyalty has become highly fragile. According to the Quantum metric report, 70% of consumers have multiple bank accounts and can easily switch their banks at their fingertips if they aren’t happy with the digital experience their existing bank provides. Therefore, banks that want to win customer loyalty have to offer digital services that are at par and meet customer expectations.

Why is Customer Loyalty Essential?

Gartner defines customer loyalty as customers’ willingness to return to a company for repeated business. It is hard for banks to retain customers at present market conditions where competitors, neo banks & Fintechs are luring consumers with lucrative offers.

Additionally, millennials & Gen Z, representing most of today’s customer base, are highly fickle & less likely to show loyalty. Without loyal customers, businesses compete in the red ocean with strong market forces working against them, which increases customer acquisition cost & retention costs while margins consistently get trimmed down.

Why Do Customers Leave a Bank?

Consumers depend on multiple banks for various needs. The Experian report shows that customers switch their banks because of high fees, the actual rate of returns, lack of digital capabilities, lack of personalization, poor customer service, lack of enough products & services, and slower banking experience. Customers’ top priorities are speed, efficiency, personalization, and easy access to online banking services.

Customer Loyalty Programs

Building Better – Customer Loyalty Programs

Research from Monferrer et al. (2019) shows a strong relationship between customer engagement & customer loyalty. It explains that customer loyalty ignites when customers feel emotionally satisfied when they engage with the bank they trust. This blog suggests five strategic ways for banks to improve customer loyalty programs during uncertain times.

Improving Customer Service through Hyper-Personalization

Banks should focus on building seamless customer experience(CX) through reimagined customer service cloud by personalizing every customer interaction. Utilize the enriched data to understand the customer journey and use deeper analytics for a 360-degree view of customer behavior. Augment AI/ML capabilities to create personalized assistants to solve customer issues. Increase automation in business processes, feature development & testing to reduce human intervention & errors. Maximize the usage of loyalty data internally to accelerate business priorities across the organization, including CRM, marketing, pricing, promo, products, services, and customer service.

Analyzing Customer Data to Create Positive CX

At the highest level, leading companies realize that creating a positive customer experience has long-term benefits. To make this connection real, C-suites need to connect the dots at every stage of the customer journey to understand customers’ feelings and harness analytics tools accordingly to identify areas needing improvement. By addressing these pain points through transformation initiatives – such as optimizing financial service interactions – businesses can create value for their customers and themselves by increasing lifetime revenue streams. The bottom line is clear: investing in understanding consumers’ wants leads to success.

financial service

Delivering Omnichannel Experiences

Omni-channel is not an option anymore; it is a business necessity. To cater to the needs of multiple generations, banks should build authentic omnichannel experiences for customers. Most organizations only focus on strengthening their mobile & web presence while ignoring other channels. E.g., One of the challenger banks cannot verify the change of address through the mobile app or website but only through call/ mail. Customers face long call wait times to speak to an agent. Agents take time to understand & act on the issue, which is time-consuming. Additionally, when the call gets disconnected, customers must go through the whole process again. This issue creates much customer dissatisfaction & leads to impaired customer loyalty.

It is not only important to provide omnichannel access but essential to providing a seamless customer experience at every touchpoint across different channels.

Agile testing

Scalability through Agility

Organizations need to be agile and flexible to maximize scalability. By collaboratively defining a streamlined taxonomy of customer journeys, companies can gain insight into their customers’ experiences and iterate continuously for optimal results. Agile testing helps formulate MVPs backed by feedback from employees and customers alike, allowing teams to refine strategies quickly when needed; this enables organizations with attainable successes early on so they may continue pursuing growth opportunities securely within their organization’s support structure!

Build Trust through Enhanced Security

According to the Edelman 2021 Trust Barometer, financial services is one of the least trusted industries in consumers’ eyes. Enhancing the security protocols is imperative in each of the customer channels. Cyber security threats are increasing & customers are concerned about their financial & personal information. Financial organizations should consistently focus on security standards & enterprise security modernization to keep their systems robust & secure. Security is attached to the organization’s brand, building customer trust.


Case Study

Quinnox Improves Digital Banking Efficiency and Customer Experience with Multi-Platform Application Development

Read More

Final Note – Don't Forget the Customer


The rush to digitize customer journeys and transform the customer experience has caught our attention, but we must remember that customers still need a human touch. After all, while technology can help ease complex interactions with consumers, there can be no successful transformation without involving the customer. Moreover, one unsatisfactory experience delivered to customers could lead them away from your business – missing out on an opportunity for loyalty & retention. Therefore it’s essential always to have their best interests at heart!

Talk to Quinnox experts to improve your loyalty programs now!

Related Insights

Case study

Quinnox Improves Digital Banking Efficiency and Customer Experience with Multi-Platform Application Development

A UK-based e-money provider that offers app-based transactions, splitting payments and driving wider sustainable finance initiatives.

Read more

How financial institutions can overcome challenges in core platform transformation

When it comes to core banking platform transformation, banks have choices—go with a traditional enterprise core platform system.

Read more
Contact us