New loyalty

The key to loyalty? The personal pleasure principle

It will take more than points and rewards to win a customer's loyalty in the data-driven Open Future. For banks, it's time to get personal.

The Tech Titans are mapping out a new kind of customer relationship, by using personal data to provide services that fit around our individual needs and wishes. At last, loyalty is becoming pleasurable.

What is loyalty?

In banking, loyalty has too often been code for inertia. But that is going to change. Opening up the data held inside banks will sharpen competition and force the pace of innovation in response to disruption by tech-first players, as we've already seen in areas such as e-commerce. The concept of loyalty to your bank will not be challenged – it will be reinvented, made personal and pleasurable.

The transactional, points-based version of loyalty is faltering. According to the 2017 COLLOQUY Loyalty Census, growth in loyalty memberships is slowing and US households use fewer than half of the 29 memberships they hold on average. The reason? Consumers don't value loyalty programs that pay no attention to their personal attitudes, behaviours and expectations.

Personal data = personal services

Winning loyalty in financial services' Open Future will mean becoming far more customer-centric, addressing my pain points, fulfilling my desires and engaging with me as an individual. Sharing my data will enable highly personalised and pleasurable services to wrap around me. And the more of my data I choose to share, the more predictive and pre-emptive these services can become, and the greater the potential for the brands I trust to make smarter suggestions that work for me and feel good.

Brand stretch vs brand rigidity

There will be very few companies with whom any customer might choose to share all, or even some, of their data. The decision over who makes the cut will come down to brand elasticity and ability to embrace new ways of talking and listening.

Amazon is the example par excellence of brand elasticity – Amazon Balance, Amazon Pay, Amazon Key, Amazon Prime, Amazon Fashion. They all make sense and carry an implicit positive association. Try doing the same with other familiar brands – financial and non-financial - and you'll see what I mean. Banks in particular tend to be heritage brands, with proven resilience only within their historic heartland.

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Talking and listening

Brand is critical because it needs to feel appropriate when a company talks to me about my most confidential financial affairs. This is where Amazon excels. It's not just the very competent update messaging that wraps around anything you buy from them; they've also invested heavily in the literal ability to talk and listen to me. People will routinely use interaction technology like Echo to interface with their life in future – a reminder that there is no absolute requirement for branches and physical locations to sustain a relationship with your customer.

Loyalty that works

But building the next generation of financial services that enable and engender loyalty is not a technology project. It's not, for those beholden to PSD2, a compliance project. It is a re-imagining of how financial services are conceived, designed and delivered, and of how the brand that offers those services listens, understands and communicates with its audience – at an individual level. This is the start of something far bigger than a battle for share of wallet or even share of mind; it is becoming the battle for share of heart and life.


The average US household is signed up to 29 loyalty schemes. It uses less than half.

2017 COLLOQUY Loyalty Census

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Winning loyalty in financial services' Open Future will mean becoming far more customer-centric, addressing my pain points, fulfilling my desires and engaging with me as an individual.
Louise Beaumont

Co-chair, techUK Open Bank Working Group

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