Driving Growth for Financial Institutions

As leaders in the financial sector, staying attuned to shifting consumer preferences and emerging trends is paramount to maintaining relevance and driving engagement. One such trend that has captured the attention of both consumers and industry observers alike is the rise of real-time redemption offerings with point-of-sale engagement and email and SMS notifications following purchases. Today, loyalty solutions can engage cardholders with personalized and timely offers. Once enrolled in a program supporting real-time redemptions, cardholders can redeem points either during the purchase or directly after for a statement credit to cover the purchase cost.  

“Real-time rewards are key in driving seamless and interactive redemptions while putting the financial institution's brand in front of the cardholder,” says Rachael Peterson, VP of Client Success and Development at ampliFI Loyalty Solutions.

Innovative rewards programs offer financial institutions a unique value proposition that distinguishes them from their peers. Backed by insightful research, the data paints a compelling picture of the growing demand and potential impact of these programs on consumer spending habits.

Catering to Consumer Expectations

Amid inflationary pressures, the demand for real-time rewards is driven by cost-saving, flexibility, and convenience. Across demographic lines, the allure is strong, with 84% of respondents1 likely to utilize this redemption method in the future.

“The ease of redemption via email or text engages prior non-redeemers into redemptions and drives top-of-wallet spend,” says Peterson.

For traditional financial institutions, integrating easily accessible loyalty programs can be a powerful tool to enhance consumer engagement and loyalty. By offering consumers the ability to seamlessly redeem points for purchases in real time, financial institutions can cater to evolving consumer preferences for instant gratification and tangible rewards.

Maximizing Card Usage and Savings

According to the CFBP2, between 2019 and 2022, there was a significant increase of 58% in rewards earnings for general-purpose cardholders, which rose from $26.1 billion to an estimated $41.1 billion. This surge was mainly driven by the growth in points, indicating that consumers are increasingly drawn to them as a form of reward.

This shift has critical implications for financial institutions, suggesting that incorporating and emphasizing points-based rewards in loyalty programs can be a strategic approach to meet and exceed consumer expectations. Adapting your offerings to align with evolving consumer preferences can ensure that your loyalty program resonates with the changing financial sector rewards landscape.

“The amazing thing is that the financial institution can have a lower value per point than traditional redemption items, but cardholders are still using it because of the convenience it provides,” explains Peterson. “So, the financial institution is getting more engagement, spend, and retention at a lower cost per point to the institution than traditional cash back redemptions. It is a win-win!”

Additionally, the data suggest a willingness among consumers to switch credit or debit cards to maximize their benefits, presenting a clear market opportunity for financial institutions to differentiate their offerings and capture market share. By incorporating innovations into their loyalty programs, financial institutions can tap into this demand and position themselves as innovators in the evolving landscape of redemption options.

Reshaping Consumer Engagement

The research underscores the transformative potential of programs like ampliFI Loyalty Solutions’ Pay With Points in reshaping consumer spending habits and driving engagement across the retail ecosystem. For leaders in traditional financial institutions, embracing innovation is a strategic imperative and a proactive step toward meeting today's consumers' evolving needs and preferences. By leveraging the insights gleaned from this research, financial institutions can position themselves at the forefront of the Pay With Points revolution and unlock new opportunities for growth and differentiation in an increasingly competitive marketplace.

ampliFI can take your cardholder engagement to new heights. Visit amplifiloyalty.com to learn more.