Published by Jessica Weisman-Pitts
Posted on October 25, 2022
4 min readLast updated: February 3, 2026
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By Gabi Kool, President of Loylogic
With average global inflation forecast to hit 7.5% by the end of 2022, business and consumer confidence has fallen by the biggest margin in a decade. From the pandemic to an international cost-living-crisis, there has been little respite in recent years and both businesses and individuals are feeling the pressure.
For incumbent retail banks, these major economic events have played out against a backdrop of rising competition as an unprecedented number of digital first and investor backed neobanks and fintechs have emerged, looking to carve out a share of the market.
So, what does this mean? All banks, and especially incumbents, are having to fight harder to attract and retain their customers. But competition is no bad thing. This pressure is forcing banks to innovate and adapt, and it’s exciting to see how financial services providers of all types are developing their digital capabilities and focusing on a more holistic customer experience – extending beyond the traditional service offering.
And one way in which they are trying to win the battle for customers is through new-age, technology and data-empowered, loyalty programmes which break the mould.
Supporting and incentivising financial wellbeing
In the current economic conditions, financial wellbeing has understandably become one of the top priorities for businesses and individuals striving for stability.
As a result, a range of innovative new loyalty solutions have emerged that can allow banks to demonstrate a genuine understanding of their customers’ financial concerns and priorities, supporting and rewarding positive financial choices that suit their individual situation.
Using data, banks can move beyond the one-size-fits-all approach and ensure that the rewards and incentives they offer will truly support and add value to the lives of their customers whatever their stage of life – whether they’re a student, buying a house, or planning for retirement.
This could involve offering accessible incentives to customers to encourage them to improve their credit score or pay bills on time, for instance. Or banks could allow members to earn rewards that support them with essential day-to-day purchases like groceries and mobile data.
Democratising rewards
Banks are also realising the value in opening up loyalty programmes to wider audiences. Where loyalty programs do exist, they have often tended to be geared towards the highest tier of customer only – meaning many banks have been missing out on a vital way of engaging and supporting a broader customer base.
But some traditional programmes have been losing impact and banks need to create an offering that meets the needs and preferences of individual customers. That means moving away from a focus purely on higher tier customers, and instead concentrating on rewarding the un-rewarded, or the under-rewarded.
By democratising rewards with customisable programmes, banks can not only support retention, but also drive the acquisition of new customers. In less mature markets like Africa – where 57% of the population do not have a traditional bank account– loyalty programmes can be an effective means of bringing the unbanked into the market.
African Bank, for example, recently launched a new loyalty programme built around their ambition to deliver sustainable, accessible, and inclusive financial services to all South Africans. The custom-built program has been created to work for all the bank’s customers and will allow members to earn and redeem loyalty points with a network of partners – covering those day-to-day purchases, as well as exclusive aspirational rewards – as well as incentivise positive financial behaviour.
Bringing loyalty to the boardroom
Banks are increasingly understanding how loyalty programmes can not only help retention and acquisition, but also be a key tool in supporting wider business strategy. And, by using the latest in loyalty technology, banks accurately measure these programmes, elevating loyalty from a marketing initiative to a vital tool that can be understood by the boardroom.
While the outlook for the global economy remains uncertain, banks still need to protect their customer base against increasing competition. To do so, banks’ service offering needs to reflect the fact that all customers are valuable, and that they can play an active role in supporting their financial wellbeing. By using loyalty technology to get a deep understanding of their customers, and adding value to their lives, banks can strengthen their relationships – and stay a step ahead of the pack.
Loyalty programs are marketing strategies designed to encourage customers to continue using a company's services by offering rewards, discounts, or other incentives.
A neobank is a type of digital bank that operates exclusively online without traditional physical branch locations, offering banking services through mobile apps and websites.
Customer retention is the ability of a company to keep its customers over time, often achieved through loyalty programs and excellent customer service.
Data empowerment in banking involves using customer data to create personalized experiences and solutions that meet individual financial needs and preferences.
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