Trends and Opportunities in Financial Institution Loyalty

The market conditions for traditional loyalty rewards programs have changed significantly in the post-Durbin era, resulting in traditional program funding models becoming unsustainable. Rather than abandoning the programs that are so popular with consumers, financial institutions are looking at ways to transform their programs to maintain a sufficient level of profitability while still delivering high value to their customers.

In this paper, we look at the market dynamics that are driving the shift toward merchant funded and relationship loyalty programs; the unique aspects of these programs as compared to traditional loyalty rewards programs; emerging consumer trends that will further impact loyalty programs; and the broader proliferation of Universal Commerce that will reinforce the necessity for customer loyalty programs.