"The industry has overindexed on card transactional loyalty for years. That model worked when credit card spending drove engagement, but today's environment demands a different approach. "We are truly at a transitional time when it comes to consumer rewards and consumer loyalty," Vladic explained. "The big concept that I strongly believe in is start with share of mind, even before share of wallet. Once you capture share of mind in this attention-grabbing economy, then share of wallet is going to come as a natural consequence.""
"This shift reflects a broader challenge for financial institutions: They're no longer competing just with other banks. Customer expectations are shaped by experiences at Amazon, Netflix, and other digital-first platforms. "For the longest time, banks were looking at how to match or compete with another bank," Vladic noted. "In this era of digital experiences, the experience that the financial institution is offering is being measured against other experiences with other brands.""
Financial institutions are rethinking loyalty as credit card spending reaches record highs amid looming economic uncertainty. Loyalty must be embedded into every customer interaction rather than treated as an add-on. The industry relied heavily on card-transactional loyalty, but that model is losing effectiveness as consumer behavior and expectations shift. Capturing customers' share of mind through attention-grabbing, relevant experiences should precede efforts to capture share of wallet. Digital-first platforms like Amazon and Netflix set customer expectations, so financial experiences are increasingly benchmarked against those brands. Embedding rewards and engagement into core product experiences is necessary to remain relevant and drive long-term loyalty.
Read at Tearsheet
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