I am a big fan of card rewards. If I have to get another credit card (apart from the two I already have), it will strictly have to be one that offers exciting rewards on my purchases. Be it acquiring points with each purchase, whiling out at fancy airport lounges, or experiencing unique offers, rewards make me a happy customer!

I have one card each from two different banking institutions. However, my loyalty towards one of them is more than the other. The main reason for this being their excellent service and personalized reward programs using AI. The process is frictionless, and I can navigate through the offers via voice and chatbots without even downloading another app.

The other institution has my vote too, but lately, they have been going lower on my preference list. Firstly, their clumsy service and jammed call centers. If I do manage to get through a call, most of the time the executive does not understand my query.

The second reason is their indulgence in pushing irrelevant offers to me almost every day through blast emails and phone calls (all marked in spam now). I get the fact that rewards are probably the only attraction to get cards these days because people no longer purchase cards just for the benefit of being able to do plain transactions. Everyone expects more, which is why every competitive institution is trying to get as creative as they can when it comes to their bank loyalty rewards. But my second bank has been doing this rather blindly.

Context is king

Using personalization in financial services, several new institutions and fintechs are ready to offer me, a stranger they have never dealt with, amazing travel benefits, free stays, exclusive experiences, referral bonuses and so much more!

For a person like me, who is always looking for offers in travel and loves redeeming points, I would fall for bank rewards programs very easily. Provided these offers are available at the right time, are genuinely meant for satisfying my need at that time and are also the best deal available. It would break my heart a little to leave my bank of five years, but the switch can happen if they do not help me with rewards.

AI in banking – It’s now or never

AI has already penetrated every business, especially the tech world. A great example is Amazon, with its amazing service and product recommendations which always hit a sweet spot. They even know what kind of books I would like to read when all I have done is just browsed on their site looking for books! This is what true personalization means, and I love it as a customer!

If I imagine for a second about my bank predicting my need for a trip to an exotic foreign land, and then offer me a travel exclusive rewards offer, partner deal and other related product options, I would love to explore it!

For this, my rather uninterested bank will have to adopt powerful Artificial intelligence and data analytics tools that will enable it to analyze behavior, life stage, social data, demographic trends, and transaction history to create a personalized and context-based reward program to enthusiastic customers like me. Personalized banking services will help them grab the attention of passive clients with hyper-targeted campaigns. This coupled with seamless transaction processing across channels like WhatsApp and Facebook messenger would keep customers like me engaged longer. We already have a lot of trust in our banks, and hyper personalized customer experience will only increase it manifold.

Here’s what banks can do to enhance customer experience:

• Offer NLP based interactive text and voice searches across channels like Website, Facebook messenger, or WhatsApp chatbot , for e.g. find a Chinese restaurant in canary wharf to redeem platinum card points
• Send pro-active personalized recommendations e.g. Redeem and get 20% off on Starbucks today!
• Offer seamless redemption facilities across channels without the need to download apps.
• Suggest bundles e.g. All-inclusive Family Holiday offer – Redeem your rewards for Travel insurance, Flight, and hotel bundle!

Offer rewards that the customers value

Today’s competitive landscape clearly demands AI powered tools that can personalize bank loyalty programs to engage and delight customers at every step of the interaction. Using AI to make reward programs for banks more effective will increase the return on their loyalty investment. It will also help significantly reduce operational costs incurred by banks.

Highly engaged customers would eventually mean greater profitability for banks. Tie-ups with thousands of retailers will also generate new modes of revenue. The key to this is delivering the right rewards to the right customer at the right time, and not blasting them with emails or calls based on guesswork. Customers want value, and banks need to give it to them at every step.

See our post on using AI for hyper-personalization and predicting the next best action, next best offer, and next best product based on dynamic personas to deliver an engaging experience.