Loyalty program. Digital strategy ’22
Brand creation history
About company
ING is a global bank with a strong European base. More than 57,000 employees serve around 38 million customers, corporate clients and financial institutions in over 40 countries. Purpose is to empower people to stay a step ahead in life and in business.
Bank products include savings, payments, investments, loans and mortgages in most of our retail markets. For Wholesale Banking clients we provide specialised lending, tailored corporate finance, debt and equity market solutions, sustainable finance solutions, payments & cash management and trade and treasury services.��Customer experience is what differentiates bank and they’re continuously innovating to improve it. Bank also partner with others to bring disruptive ideas to market faster.��Bank shares are listed in Amsterdam (INGA NA, INGA.AS), Brussels and New York (ADRs: ING US, ING.N).��When it comes to sustainability, we facilitate and finance society’s shift to a low-carbon future and pioneer innovative forms of finance to support a better world. Sustainability forms an integral part of ING’s strategy.
In Sustainalytics’ view, ING’s management of ESG material risk is ‘Strong’ (September 2021).
In January 2021, ING received an ESG evaluation score of 83 ('strong') from S&P Global Ratings.
ING's ESG rating by MSCI was upgraded to 'AA' in December 2020.
ING Group shares are included in major sustainability and environmental, social and governance (ESG) index products of leading providers STOXX, Morningstar and FTSE Russell.
Link - here�
Where you’ll find ING Bank
Bank serve customers in more 40 countries.
How ING doing? Result 2ndQ/2022
How is the banking industry �changing? Practice 2022�
The banking industry has, for centuries, withstood many of the changes occurring in the world; from wars, global financial crises, through to the advent of automation and AI. For a while, it seemed therefore that banking incumbents were completely immune to the effects of digital transformation and the rise of new financial services providers.�
However, as technological advances, shifting demographics and new definitions of good customer experience give rise to the increasing popularity of financial technology (fintech), that notion is now being challenged.
And if approaches to fintech adoption may have once seemed lukewarm at best, the COVID-19 crisis proved to be a real turning point in this regard. As it stands, fintech app interaction increased by 73% following the outbreak of the coronavirus.
Challenger banks such as Monzo and Revolut, especially, have made real waves in the banking sector, redefining customer experience and capturing the interest of Millennials and the digitally innate Gen Z, who not only see great appeal in these new digital banks but also view traditional financial institutions as increasingly redundant. This is key, given that Gen Z are proving to be the most financially savvy generation, while also surpassing surpassing Millennials as the world’s powerful consumers.
Given the above, as well as the levels of innovation arising in financial technology services, traditional banks are now facing a lot of pressure to keep up with the new entrants and reduce customer churn.
Sticking to what has worked for, well, centuries, is simply becoming untenable. As digital currencies are soaking up large amounts of money from the traditional monetary system, and banking revenue streams are being attacked by decentralized financial solutions such as embedded banking and digital lending, banks need to find innovative ways of retaining existing customers and attracting new ones.
Listen to the market. �European trends. �What do customers want today?
Attracting and retaining �customers with loyalty programs�
One of the prevailing legacies of the pandemic is enhancing customer experience and instilling our collective belief in its importance. As we are now emerging from a period of great suffering and deprivation caused by the pandemic, many banks and other financial institutions are beginning to understand that simply giving people the services and products they need isn't enough to promote customer satisfaction and thus ensure customer loyalty.
As such, it is no longer enough to simply give people the services and products they need. Given that we are now emerging from a time of great suffering and deprivation afforded us by the pandemic, people’s expectations with regards to the experiences they receive have changed a great deal.
According to Forrester, a renowned customer research company, the COVID-19 pandemic gave rise to a new type of customer - a “once purely rational, loyal customer who has been replaced by a less loyal, more emotional decision-maker” who has come to expect a more empathetic, personalized approach from the companies they do business with, including their bank or credit union. What reverberates through Forrester's research is that product itself is no longer enough - customers now also expect a product that sees them and their needs, and one which understands the individual customer's lifestyle.
Attracting and retaining �customers with loyalty programs�
Likewise, younger generations such as Millennials and Gen-Z are increasingly focused on authentic brand experiences and product personalization, whether from their favorite retailers or their chosen financial institution.
This new set of expectations coupled with the changing landscape of the financial services sector represent a “watershed moment in banking”, as Accenture puts it. As a result, banks need to find innovative ways of building meaningful, lasting relationships with their customers to compete with fintechs, who are renowned for providing seamless, highly personalized customer experiences and innovative loyalty programs.
Coupled with the fact that, according to the Deloitte Employee Survey, establishing customer loyalty is trickier in the banking industry than in other industries, creating powerful customer programs to engage customers is ever so important for banks. Doing so has been shown to pay great dividends - for example:
In a similar vein, a study by KPMG reported that 61% of customers found it “extremely important or very important” for banks to focus on coming up with more innovative ways of rewarding loyal customers.
As is clear from the numbers reported above, bank rewards programs are far more than a fun gimmick nowadays. On the contrary, loyalty programs speak to a brand’s stance and commitment to providing excellent customer experience, and exceeding customers’ ever-growing expectations.
Whether that’s through direct cash rewards, cashback, or interest rate boosters, it’s more important than ever to make the customer feel recognized and valued, and place them at the center of the business.
Below, we look at examples of banks who are doing just that through the use of reward schemes and innovative loyalty solutions.
Competitor market �in world
1. Citibank's Citi � ThankYou® Rewards�
Originally founded in 1812 as the City Bank of New York, later to become First National City Bank of Europe, Citibank is a global financial services company boasting a customer base of 100 million in 98 countries globally. Since its inception, the bank has expanded into 2,649 branches, with a reported revenue of $74 billion USD in 2019.
As the world’s largest financial organization, Citibank offers a plethora of products and services, such as various checking and savings accounts with no minimum deposit; different types of credit cards that tie into Citi’s rewards program; as well as personal and business loans, mortgages, IRAs, and lots more.
J.D. Power recognized Citibank as scoring highest in its customer satisfaction survey with regards to retail banking advice (February 2020).
Citibank’s bank loyalty program - Citi Thank You Ⓡ Rewards - is a points-based program allowing customers to earn points through a number of ways; for example, using a Citi credit card, banking with Citi using an enrolled checking account, as well as adding qualifying services and products to an existing Citi checking account. Examples include Auto Save, Mortgage, Home Equity Line/Loan, or Personal Loan.
The points collected by Citi’s customers can then be redeemed for cash back at up to 1 cent per point, which means that 10,000 points would equal $100 in cash. However, apart from cash back, Citi has an extensive portfolio of rewards that customer points can be used on. Customers can shop directly using the points at retailers such as Amazon, CVS, Best Buy, in addition to BP, Shell, and others.
Alternatively, the points can also be exchanged for gift cards and used at countless places, such as restaurants, hotels, airlines, and many retailers.
What makes Citibank's loyalty program especially unique is the level of freedom and flexibility customers have in choosing how to spend their points. Other than cashing them in for money or gift cards, the points can also be used to pay bills online, donate to charitable organizations, or even share points with other members of the banking giant’s loyalty scheme.
2. JP Morgan’s One Card�
JPMorgan is the largest U.S. bank, by total assets, and a global financial services company, offering services such as consumer, investment and commercial banking; in addition to asset management for individual customers, businesses, institutions and governments.�
It is also one of the largest and most respected investment banking institutions, alongside Goldman Sachs, enjoying rocketing stock performance for the past few years (shares up 148% as of November 2021).
Similarly to its competitor, Citibank, JP Morgan has a points-based bank loyalty rewards scheme called One Card. Its premise revolves around the use of a JP Morgan card, through the use of which consumers collect points.
Each reward point is equivalent to a dollar spent, and there are no limits to the amount of points a consumer can earn - neither do the points expire, as is often the case in the case of loyalty programs.
The points can be used in a variety of ways - cash credit, travel, gift cards, as well as merchandise. For big businesses, in particular, the option to reinvest the points into the business or rewarding employees can be a nice added perk.
The points are also very easy to manage, especially for those customers who typically spend (and earn) a lot. The program is fashioned with powerful controls to reduce the risk of fraud or misuse in addition to real-time reporting to make the points easy to keep track of.
That being said, it seems the program is particularly tailored to high-spending customers and corporations, given the types of benefits available, as well as the extra bonuses, e.g. 25,000 bonus points after spending $50,000 within 3 months of account opening.
3. Silicon Valley Bank’s � SVB Rewards�
Silicon Valley Bank (SVB) is a U.S. bank founded in 1983 and headquartered in Santa Clara, California. The bank was created specifically for the benefit of businesses, especially start-ups, 30,000 of which SVB has helped fund.�
It is one of the country’s biggest banks and has been ranked #15 out of 100 in Forbes’ 13th annual analysis of America’s Best Banks (based on growth, profitability and credit quality).�
Its bank loyalty program, SVB Rewards, is designed for customers (businesses) who have applied for an “Elite Card”, i.e. the Silicon Valley Bank MasterCard World Elite Business Credit Card, and paid the fee required to participate in the program.
Similarly to the two programs above, the SVB Rewards program is centred around points collection. However, unlike Citibank's loyalty program, points can only be earned using the card and participation comes with a fee.
Points holders are offered a number of choices regarding redemption of their points, and are given a catalogue, which presents all of the available options. Among them are gift cards that can be used at restaurants, retailers, petrol stations, as well as charities. The catalogue also features prepaid cards that account holders can send to someone as a “bonus”.
Other options include merchandise, such as a Michael Kors watch, and a coffee maker; in addition to travel rewards and a TSA Precheck voucher.
The range of rewards in the SVB Rewards loyalty program is perfectly tailored to business owners and their employees, capturing their potential needs quite well.
4. Capital One Rewards�
Founded in 1994, the American bank, Capital One is a relatively recent addition to the traditional banking space, with very few branches and all in the US. Nevertheless, it has made a name for itself specializing in credit cards, car financing options, and savings accounts.
Capital One offers accounts for businesses and individuals, on top of the option for parents to open a savings account for their children with no monthly fees or minimum balance requirements.
While the bank is best known for offering credit cards to those with “less-than-perfect credit”, their savings accounts are an attractive product in their own right, invariably offering high APYs.
The Capital One Rewars scheme is a multi-tiered program, offering a range of perks and benefits for its credit card users. The three tiers are:
The Capital One Rewards program seems perfectly suited to the average customer, as well as business owners getting in a lot of air miles and using their credit card often.
5. Revolut Rewards�
Revolut is another digital-only bank, and also a trailblazer in the challenger bank space. Hailing from London, the fintech unicorn has been around since 2015, and has made real waves in the banking industry.
Boasting a slogan that presents itself as “one app for all things money”, Revolut has been consistently living up to its promise. Year after year, the neobank has been increasing its range of products and offerings, and showing us that banking doesn’t have to be something we dread. Given its “unicorn” status; a customer base of 18+ mln personal users and 500k business users around the globe, it’s fair to say that Revolut has succeeded.
Similarly to other banks we list in this article, Revolut has its very own customer loyalty program. As part of it, the company offers things such as:
While Revolut's products and offerings can be deemed revolutionary in terms of the financial services industry, its loyalty program is very similar to those offered by banking incumbents. Its advantage, however, is that the rewards are very easy to keep track of within the app and the system itself is quite simple.
6. Discovery Bank’s � Vitality Rewards�
Discovery Bank is another South African bank. Operating completely as a digital bank, it allows customers to open their bank account quickly and hassle free. Its MO centres around providing seamless, highly functional banking - something that has not been seen in the country before.
Apart from the above, Discovery Bank also invests heavily into facial recognition and KYC (know your customer), which helps prevent fraud, money laundering and corruption without compromising the features that make Discovery Bank attractive to its customer base.
Discovery Bank also has its very own customer loyalty program called Vitality Rewards, offering a highly original approach to rewarding customers.
The currency used by the loyalty program is called “Discovery Miles”, and these can be collected whenever a customer uses their credit card responsibly and on things that promote health and wellbeing, such as gym memberships, health stores, and sustainable rides.
In return, customers get paid back in Discovery Miles and Vitality Active Rewards. Discovery Miles can be used for Uber rides, fuel, flights and holidays; whereas, Vitality Active Rewards can be used at participating gyms, healthy food stores and other retailers.
The closer customers get to achieving their health, drive, and money goals, the more rewards they receive - for example:
The cashback from the above can either be used on subsequent purchases, paid directly back into a customer’s corresponding rewards account, as well as shared with friends, or donated to charitable organizations.
Discovery Bank loyalty program is highly unique, and very much in line with consumers’ shifting values. In particular, the bank seems to respond to the post-pandemic uptick in value-based purchasing and the younger generations’ penchant for all things sustainable and authentic. This is both a powerful retention strategy, as well as a great way of connecting with new customers.
7. Wells Fargo Rewards �
Wells Fargo has, in recent years, become one of America’s biggest banks, making the top 5 alongside others such as JP Morgan and Bank of America. The bank enjoys a customer base of 70 million, $1.97 trillion in assets, and a market share of $97 billion.
While Wells Fargo does serve a lot of individual customers and small businesses, a lot of its resources are also devoted to high-net worth individuals (HNWIs) in need of wealth management guidance and investment opportunities. As such, it is often associated with the elites, similarly to the banks mentioned above - which could be why the slogan of its rewards program is “Rewards that keep it real”.
Wells Fargo Rewards is available to all eligible Wells Fargo rewards-based credit card holders (see below).
Customers signed up for one of these special credit cards stand the chance of receiving a variety of rewards. From redeeming rewards back to account, redeeming for purchases and gift cards, or using the rewards towards airline and holiday expenditures, Wells Fargo’s customers have many options.
The rewards can also be shared with charitable organizations such as the American Red Cross, or a fellow Wells Fargo account holder.
Equally importantly, the program is easy to manage and keep track of through the Wells Fargo website.
8. Warba Bank’s Pocket�
Founded in 2010 in Kuwait City, Warba Bank was created in response to the economic crisis facing Kuwait. The bank set out to be a major digital-first Islamic retail and corporate bank in the country, to which end Warba Bank became part of the Islamic Banks Register at the Central Bank of Kuwait.
Warba Bank’s mission has been to provide cutting-edge financial solutions and experiences to its customers and afford its shareholders competitive levels of profitability. Despite only having been formed 12 years ago, the Kuwaiti bank has taken the Middle Eastern banking sector by storm, competing both regionally and internationally, and providing a vast range of financial products and services.
Warba Bank’s loyalty engine called Pocket was created as part of Open Loyalty’s collaboration with the banking innovator (read case study here). Beyond many of the technical specifications provided by Warba Bank, the goal of the program was quite simple: delivering value and great customer experience for end users and facilitating an authentic connection between the consumers and the brand.
The client also wanted to increase the use of the mobile app and encourage customers to conduct more online payment card transactions.
Ultimately, the loyalty engine was designed as a points-based reward system. As such, members receive points for doing the following:
The points called as part of Pocket can consequently be cashed in for things such as:
The Pocket loyalty program is innovative in the way it is presented. The interface is very attractive and user-friendly; the terms and conditions clearly stated; points easy to collect so long as the account holder regularly uses their account; and the range of prizes varied enough to appeal to most people.
Loyalty program trends matrix�
The graph shows the importance of trends from two angles: the biggest impact on customer loyalty marketing in 2-3 years and trends with the biggest urgency in terms of investment in 2022.
Trends for upcoming 2-3 years�
The future of customer �loyalty programs
The pandemic increased the need for constant shopping pattern analysis and making actionable insights based on them. The ability to implement quick changes in the communication and shape of the loyalty program is the key to success.
Building a solid data-driven base is still one of the main focuses for most marketers. With the end of third-party data, data compliance is becoming important now more than ever. For many businesses, loyalty programs will become a strategic asset and the main source of customer data.
The predictable future of loyalty programs lies in hyper-personalization and the frictionless omnichannel customer experiences at every touchpoint. Going outside of typical loyalty mechanics and the deeper integration of loyalty programs with the payment process might be the next reasonable steps for many brands.
Cash_ING’U - loyalty program �for client ING Bank
The proposal is the implementation of Cash_ING’U -unique loyalty program in the banking market in the Netherlands.
This is a set of marketing measures aimed at rewarding and encouraging loyal customers for their cashless payments, which is beneficial for the bank.
Loyal customer = Revenue generating client
Why does ING Bank need it?
Who is the target audience?
We exclude:
SWOT analysis - “Strengths”
SWOT analysis - “Weaknesses”
SWOT analysis - “Opportunities”
SWOT analysis - “Threats”
Problem to be solved
General:
Launch of a unique loyalty program in the Netherlands market.
Card tokenization and payment
Cash_ING’U
Receive and exchange points
Cash_ING’U
Loyalty program
How to collect points?
More purchases = more points
What can you exchange points for?
Cash_ING’U
How cashback is accrued
Cashback is measured in bonuses (a conditional unit charged by the bank), which are accumulated in the Cash_ING'U account for payment:
Life hack: if you pay by credit card, the percentage of cashback in upgraded categories will be higher!
Maximum accrual of bonuses every month = 100 euros
Cash_ING’U �у Bankieren ING Bank. Interface
1 level
New user
2 categories out of 3
2 level
User
2 categories out of 4
3 level
Follower
3 categories out of 5
4 level
Real man
4 categories out of 6
5 level
Fan
4 categories out of 7
6 level
Expert
4 categories out of 8
7 level
Captain
5 categories out of 9
8 level
Master
5 categories out of 10
9 level
Professional
6 categories out of 10
10 level
Guru
7 categories out of 10
What gives status?
Possibility to choose more categories every month. More categories = more cashback.
How to raise the status?
More contactless card payments.
How to choose "Categories"?
- You need to log in or install the bank's mobile application.
- Select the "Cash_ING'U" section.
- On the bonus balance screen, click the "Categories" button.
- Choose categories from the list proposed by the bank (once a month)
- Pay with a bank card and receive your shopping bonuses!
Cash_ING’U
у Bankieren ING Bank. Interface
Cash_ING’U
Loyalty club
Possible categories of increased accrual of cashback to choose from:
Digital
communications
Channel communications
№ | Channel communications | Why? | Example message |
1. | Banner on the main page of the bank, which will lead to Loyalty program landing page | Full description of the product with mechanics, official rules, as well as a link to download the bank's mob application for activation in the loyalty program | WOW! You are now on the page of a unique loyalty program …. |
2. | Mail distribution for bank clients | Depending on the needs of the client and open products in the bank, develop an email list and, for convenience and comfort, send the client with a hyperlink for activation in the loyalty program. To be sewn into technical emails, for those who open card debit/credit accounts | Congratulations! You is a member of a unique loyalty program... To receive up to 10% cashback from purchases, follow the link for activation in the program.... |
3. | Push notifications in the bank's mobile application for bank customers | Since the platform will be implemented directly in the bank's mobile application, it is convenient for the user to see the history of all push notifications. And the most important thing is that this channel is free and implemented on the mobile application platform. This channel is easy to implement, and depending on the client's portrait, it is possible to set up the sending of messages without the feeling of spam. It is also convenient to direct the client via a hyperlink to the exact screen that is needed for the correct use of the client's path in the middle of the same application with the push notification. Smart segmentation in CRM and Real Time Communication | We see you like shopping at ZARA, and we like cashing you! So don't delay to exchange bonuses in the program to receive a special discount in the chain of stores. Follow the link... |
Channel communications
№ | Channel communications | Why? | Example message |
4. | Advertising screensaver for ATMs | Customers come to an ATM to withdraw money or perform other operations with a card. We remind you about the loyalty program and encourage you to pay with a contactless card instead of cash. Placement of the screen saver is free, as it is carried out on the bank's processing platform. | Hello! Do you want to withdraw money? But you could save up to 10% in the program... It's that simple! Scan the QR code, activate the program on your smartphone and make contactless payments with your card in stores" |
5. | SMS (for those who have not enabled push notifications in the application settings) Cross Sell |
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6. |
| To increase the scope of attracting a new audience and increase activity among the current customers of the bank. | We are giving away 1,000,000 bonuses at ING Bank! Install the application, reveal the bank card and buy everything you want! Exchange bonuses and become a participant in the draw" |
Channel communications
№ | Channel communications | Why? | Example message |
7. | SMM - Release (Facebook, Instagram) | Advertise loyalty programs on the bank's official social networks in order to increase interest and reach the target audience. As well as other useful information such as tips on saving money. Advertising of raffles and special discounts from partners | These are the gifts very cool! This month you have a chance to win them in Cash_ING'U's raffles: - the latest Apple 13 on 256 GB; - a weekend in the Maldives for two; - "Apple laptop; - concert tickets to hear Lost On You live; - annual subscriptions to a network of fitness clubs. How to participate in the draw? Everything is simple! You need to go to the bank's mobile application, select the Cash_ING'U section, click "Use bonuses" and "Win a gift". Good luck! |
KPI