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Benefits of Customer Loyalty System for Fintech Solutions

20 Jul 23  

Reading Time: 6 minutes

Ankitha Prasannan

Content Writer

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A user experience that fosters better customer loyalty should be one of your primary concerns when developing a fintech product for a new company or an established major bank. With loyalty system for fintech solutions, increasing user retention or maintaining it over time is possible. 

Customer loyalty is crucial if you want your fintech products to outperform rivals in a market where there is constant expansion. This article examines how customer loyalty and fintech solutions are related, why prioritizing customer loyalty is advantageous, and how to develop fintech solutions to draw in and keep devoted consumers.

Exploring the Landscape of Fintech Loyalty Programs

The future of banking is digital. Consumers prefer to conduct most of their banking digitally, including establishing accounts, issuing checks, and initiating transactions.

  • The pandemic hastened this transition

Banks forced clients to go digital after closing their offline locations. Nevertheless, digital banking is still growing even as the post-pandemic period gets underway.

  • Digitalization is a desire among younger generations

Gen Zers utilize mobile banking services over 50%. This group will expect further digitally oriented banking products as their purchasing power increases. The digital transformation in the banking industry has levelled the playing field. Banking giants once controlled the market. Customers are now seeking the finest digital CX, and fintech businesses are succeeding in this market.

On the other hand, this tendency is severely affecting banks. Raddon said that in 2010, there were around 15,000 banks. The figure decreased to slightly over 10,000 a decade after. And according to specialists, by 2025, there will only be 8,000 of them. Bank turnover is increasing even as they upgrade their online communications.

Banking institutions need to concentrate on how customers can strengthen their brand loyalty to prevent clients from switching to fintech services or departing for any other attractive reward offer they see.

Benefits of Loyalty System for Fintech Solutions

Many clients are looking for fintech solutions, from technological icons like Google to neo-banks like Chime, to satisfy their demands as the need for digital banking is stronger than ever. The emerging rivalry forces banks to step up their attempts to keep customers using the loyalty system for fintech solution. The main advantages of customer loyalty programs, which render it a vital tool for every shop, are as follows:

1. Enhanced Satisfaction & Development 

The FinTech loyalty program improves customer retention, draws in new clients, and fosters revenue development. It does this by offering a personalized payment experience and unique rewards. Goodbye to the times when you lost important clients to your competitors!

2. Important Consumer Information & Insights 

The Customer Program gives merchants important consumer behavior and preference information, enabling them to customize their marketing initiatives and product lines to increase client pleasure and engagement. Understanding clients has never been simpler!

3. Customized Rewards & Benefits

Companies have the option to create bonuses and benefits that are specific to their business mission and targets. The loyalty system for fintech solution helps to better provide the users with rewards and benefits that boots customer retention. This encourages actions that result in increased sales and customer loyalty. One size does not fit all; who said?

4. Safe & Rewarding Payment 

Protected and rewarding solutions are essential in the contemporary age of digital payments. Both are provided by the FinTech loyalty program, allowing shops to accept various payment options and assuring safe transaction processing.

5. Competitive Advantage

By offering a distinctive, personalized, and engaging customer experience that fosters customer loyalty, the FinTech loyalty program assists merchants in standing out. Make a statement in a congested market to keep clients returning!

Loyalty System for Fintech Solutions That Work Best

There are numerous different kinds of rewards or loyalty programs. Some are as successful as miracles in one industry but less so in others. The same is true for the fintech industry, and some effective loyalty programs include:

1. Recommending Programs

Referral programs are a very effective tool for fintech businesses to market their accounting services or solutions. Companies do this to thank clients for recommending relatives and friends by giving them points, deals, or cash.

2. Rewards for Making Purchases

Users can receive incentives in this program based on their purchasing power. Buyers using the business’s credit card or payment app receive incentives and many additional advantages, including rewards, gift cards, and other things.

3. Tiered Loyalty

Tiered loyalty programs do incredibly well in the financial industry. Users advance through the levels as their purchasing or banking activity increases, receiving VIP service, exceptional experiences, and customizable incentives.

4. Consumer Behavior-based Initiatives

Loyalty system for fintech solutions can offer users rewards for various actions, including using their credit card to make a purchase, depositing cash, updating their services, trading stocks, purchasing more financial goods, and doing surveys.

5. Gamified Loyalty Programs

According to a Snipp survey, companies that used gamification saw a 22% rise in customer loyalty and a 47% boost in commitment. Gamification has great potential in the financial industry for bringing in new clients and solving problems. Gamification encourages greater interaction and participation from users with loyalty system for fintech solutions. 

6. Programs for Fresh Account Activation

Additionally, fintech businesses design loyalty programs to promote the opening of fresh checking and savings accounts, as well as:

  • Registering for direct deposit

  • Keeping a minimal amount in the account

  • Downloading a mobile application

This encourages the opening of new accounts by consumers and draws many of them to the business.

7. Points for Special Events

This loyalty program offers rewards for any custom conduct, incident, or transaction, whether referring a new client, placing a recurring purchase, or registering for the monthly email.

Loyalty System for Fintech Solutions: Examples from Banks

Loyalty system for fintech solutions provide the capacity to reward and motivate clients while interacting with financial services. Due to the fierce competition among loyalty programs in this market, banks should consider loyalty programs that foster long-lasting connections with their clients.

An efficient fintech loyalty program will assist you in increasing customer happiness, providing current consumers with greater value for comparable items, raising brand recognition, and decreasing customer turnover. 

The top customer loyalty programs are shown below as examples of your financial solution:

1. Blue Rewards – Barclays

Barclays, a British global investment firm and provider of banking services, has developed a loyalty program that emphasizes cashback benefits but charges a monthly fee:

  • With more than 150 merchants, you can receive up to 10% cashback in your Rewards Wallet.

  • Rewards are obtained for several solutions, such as debit payments, mortgage loans, and life insurance.

  • Participation charges £4 and necessitates monthly account deposits of at least £800.

2. Purchase Eraser – Capital One

The American bank holding corporation Capital One lets its users use their rewards cards to perform travel-related transactions, then use their accumulated miles to deduct the amount from their statement:

  • Users may earn miles on every transaction, redeem them for various travel-related purchases, and take advantage of limitless cashback benefits.

  • Rewards remain active for the duration of the account.

  • Credits may be exchanged while making purchases at or using Paypal.

3. Citi Thank You – Citibank

With its headquarters in New York, Citibank is a global American investment bank and financial services company. The firm’s loyalty program highlights the power of these programs in this industry:

  • Citi credit cards are required for registration; for every $1 invested with the card, 1 point is gained.

  • For the initial 100,000 points, all redeeming choices will earn 10% in return points.

  • For $25, users can purchase 1,000 points.

  • Credits can be exchanged from one individual’s account to another.

  • Travel incentives, vouchers, cash rewards, mortgages or educational loan repayment, and even monetary donations to charities can be made using points.

4. Going Far Rewards – Wells Fargo

The headquarters of the American banking services company Wells Fargo is in San Francisco. By market value, it is the fourth-largest bank globally, and by overall assets, it is the fourth-biggest bank in the US. The business advertises a sophisticated reward-based credit card system:

  • Users may get points by making online purchases and using their credit cards.

  • Every credit card has a unique rewards program and advantages.

  • There are four types of rewards: vacations, auctions on the internet, vouchers, and products.

5. Preferred Rewards – Bank of America

The Bank of America is a Charlotte-based, international American banking, investment, and service bank with locations worldwide. The company offers a tier-based bank loyalty program with better rewards at every level.

  • The Gold level provides a payment decrease, a 5% interest rate increase, a 25% incentive on qualified purchases, premium credit service, and no charges for some financial benefits.

  • The Platinum level necessitates a balance of at least $50,000, boosts the value of all current privileges, gives users 12 free ATM withdrawals annually, and enables free online stock and ETF trading.

  • Customers with a balance of $100,000 or more on their account qualify for the Platinum Honors rating, which offers even higher discounts and limitless free ATM withdrawals.

Wrapping Up

Fintech app development is one of the worldwide businesses with the fastest growth. In addition to a promising future and enormous development opportunities, the sector faces several difficulties. Loyalty System for Fintech Solutions are an excellent way to overcome challenges and improve client loyalty. The right loyalty system for fintech solutions may also boost customer loyalty and offer insightful data on consumer behaviors.

For several very prominent international fintech organizations, we at Mindster have developed top-notch loyalty programs for the fintech industry. We are known as the leading mobile app development company, with more than 12 years of excellence and expertise in the field.  Contact us for a free consultation to learn about our fintech loyalty solutions.