Reinventing loyalty in financial services – the personal pleasure principle
The concept of loyalty is shifting, driven in part by the relentless, data-driven approaches of the Tech Titans. For banking, this means moving from a transactional, rewards-based concept of loyalty to something far deeper, and more personal – and, for the first time, pleasurable. This will require financial institutions to embrace data sharing via APIs, data augmentation and an entirely new way of valuing and acting upon what that data reveals.
What does loyalty really mean? For the banking industry, it has too often been code for inertia because when it comes down to it, most banks and credit unions are offering bland cookie-cutter products.
However, the advent of Open Banking will result in increasingly searching questions being asked of all financial services players. Opening up the data held inside banks will sharpen competition to the benefit of those customers by forcing the pace of innovation in response to the disruption being brought by tech-first players.
This is not a notion exclusive to financial services, as we have seen in areas of e-commerce dominated by the giant tech companies. In a world where consumer behavior and technology disruption are catalyzing social and commercial change at an unprecedented rate, the concept of loyalty in banking will not be challenged. It will be reinvented, made personal and pleasurable.
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