The Future of Loyalty in BFSI
The Future of Loyalty in BFSI
Trends to Look Forward to going ahead
The disruption fintech industry has brought about with its innovative technology solutions has impacted the traditional banking system far beyond what one could have imagined. In the last decade the conventional way of banking has evolved beyond recognition. With a surge in demand for personalized, on-the-go banking experiences, financial institutions have been compelled to invest in sophisticated banking technology to drive customer engagement and loyalty.
Simply put, the ever-evolving landscape of customer expectations, demographics, and the extensive utilization of technology to drive customer engagement and loyalty is fundamentally reshaping the way the BFSI industry operates and perceives loyalty. In this blog explores the emerging trends in the BFSI space with regards to loyalty in 2024.
Simply put, the ever-evolving landscape of customer expectations, demographics, and the extensive utilization of technology to drive customer engagement and loyalty is fundamentally reshaping the way the BFSI industry operates and perceives loyalty. In this blog explores the emerging trends in the BFSI space with regards to loyalty in 2024.
Technology: Driving Loyalty in BFSI
Today both digital and traditional banking co-exists. However, the adoption of digital banking has been made possible given the advancements in artificial intelligence (AI), machine learning (ML), and the willingness of the BFSI industry to adopt these cutting-edge technologies. The Indian BFSI sector in particular has emerged as the leader in implementing and adopting AI with the highest AI maturity index. Besides increasing efficiency, reducing risks, and cost effectiveness perhaps the most important factor driving banks and financial institutions to invest in technology has been to attract and engage the new-age tech savvy users and thereby ensure customer loyalty.
Beyond increasing efficiency, reducing risks, and achieving cost-effectiveness, perhaps the most crucial factor driving financial institutions to invest in technology is the imperative to attract and engage the new-age, tech-savvy user base, thereby ensuring customer loyalty.
With 67% of consumers pledging loyalty solely based on a brand’s loyalty initiatives, investing in an easy-to-implement and manage loyalty solution has become critical. Let’s deep dive into how what trends will be driving customer loyalty in the BFSI space in 2024 and how technology can be a key enabler in achieving this.
Beyond increasing efficiency, reducing risks, and achieving cost-effectiveness, perhaps the most crucial factor driving financial institutions to invest in technology is the imperative to attract and engage the new-age, tech-savvy user base, thereby ensuring customer loyalty.
With 67% of consumers pledging loyalty solely based on a brand’s loyalty initiatives, investing in an easy-to-implement and manage loyalty solution has become critical. Let’s deep dive into how what trends will be driving customer loyalty in the BFSI space in 2024 and how technology can be a key enabler in achieving this.
Trends forecast in the BFSI sector – 2024
1. Hyper-personalization
as a differentiator to drive customer loyalty
as a differentiator to drive customer loyalty
Elevating customer experience is not just about creating a highly captivating and user-friendly mobile app or online platform. Delivering a consistent and relevant experience across all customer touchpoints is the key to enhancing customer service and driving engagement. This is especially true for the BFSI industry, where customer interaction begins from inquiry or raising a query, account opening, buying an insurance policy, upgrading to a new policy, new investments, applying for a loan/locker facility, investing, financial advisory, issue resolution, and more.
Delivering hyper-personalized services (creating customized and targeted experiences and delivering highly contextual messages) at the right time and through the right channel is what will elevate customer experience.
Delivering hyper-personalized services (creating customized and targeted experiences and delivering highly contextual messages) at the right time and through the right channel is what will elevate customer experience.
Consider a case in point
A bank offering an add-on credit card with zero -maintenance fees and exclusive airport lounge access to one of its customers who recently opened a joint account in the bank after getting married. Also, extending a locker facility with the bank with nominal rentals for the first year.
Another customer who took a test-drive for a new car is offered a car loan at an attractive interest rate and an equally competitive car insurance plan.
A bank offering an add-on credit card with zero -maintenance fees and exclusive airport lounge access to one of its customers who recently opened a joint account in the bank after getting married. Also, extending a locker facility with the bank with nominal rentals for the first year.
Another customer who took a test-drive for a new car is offered a car loan at an attractive interest rate and an equally competitive car insurance plan.
Both these examples illustrate the obsolescence of the one-size-fits-all approach. This in part can be attributed to the ease of access to technology and the ability to leverage data in a way which enables brands to make every customer interaction unique and personal which has led to customers expecting a certain level of personalization. The BFSI industry must now move beyond the “know your customer” (KYC) ethos to a “understand your customer” philosophy.
This is where a cutting-edge platform like LPaaS from Easyrwardz can play an instrumental role in delivering a truly hyper-personalized customer experience and drive customer loyalty.
Some of the unique features of LPaaS that helps financial institutions hyper-personalize customer experiences are:
This is where a cutting-edge platform like LPaaS from Easyrwardz can play an instrumental role in delivering a truly hyper-personalized customer experience and drive customer loyalty.
Some of the unique features of LPaaS that helps financial institutions hyper-personalize customer experiences are:
Granular customer profiling
Real-time insights and predictive analytics
Technology driven hyper-personalization
Tailored product recommendations
Financial institution specific customization
2. BoT
Convergence of BFSI and IoT (Internet of Things)
Convergence of BFSI and IoT (Internet of Things)
IoT refers to a network of inter-related devices embedded with a software which enables them to connect and exchange data with other IoT devices and cloud. BoT or the convergence of BFSI with IoT has redefined traditional banking, enhanced customer experience, and improved financial institutions overall operational efficiency.
Some ways in which BoT has enhanced customer experience:
Some ways in which BoT has enhanced customer experience:
Contactless payments
With financial institutions adopting numerous contactless payment solutions, customers can now initiate payments with their smartphones and smartwatches. This not only saves time but also minimizes contact with systems and is incredibly convenient.
Virtual financial advisors
Chatbots can offer real-time responses to customer inquiries, guide users through the app, and connect them to a financial advisor when needed. This enhances customer support and accessibility.
Biometric authentication
Most smartphones now feature biometric authentication; which financial institutions can integrate into their apps. This eliminates the need for complex passwords and makes logging in seamless and secure.
Facial recognition
By identifying unique facial features to establish user identity, BoT adds an extra layer of security, minimizing unauthorized account access and fraudulent transactions.
Fraud prevention
IoT-generated data combined with advanced data analytics enables financial institutions to identify unusual behavior, analyze transaction data in real-time, and quickly prevent fraudulent transactions.
This sheer convenience that BoT brings to customers is unparalleled. The trend will continue to evolve and become more sophisticated and be a key differentiator in driving customer loyalty in 2024 and beyond.
3. AI and Machine Learning
The Power of Predictive Personalization
The Power of Predictive Personalization
Beyond simply streamlining processes and boosting efficiency, AI and Machine Learning (ML) are revolutionizing the BFSI landscape by unlocking the secrets to predictive personalization. This cutting-edge technology allows financial institutions to analyze vast amounts of customer data, understand their behaviors and preferences, and anticipate their needs, creating hyper-personalized experiences.
This sheer convenience that BoT brings to customers is unparalleled. The trend will continue to evolve and become more sophisticated and be a key differentiator in driving customer loyalty in 2024 and beyond.
Imagine this
- A bank recommending a high-yield savings account to a customer with a history of responsible budgeting and minimal debt, just when they're looking to invest a lump sum.
- Offering a car loan at a competitive rate to a customer who frequently researches car models online and recently test-drives a new vehicle.
- Tailoring investment options based on a customer's risk tolerance and long-term financial goals.
This is the power of predictive personalization. By going beyond simply knowing their customers, institutions can truly understand them, enabling proactive and relevant engagement that fosters deeper loyalty.
A study by Accenture found that 75% of consumers expect brands to personalize their experiences, highlighting the growing demand for tailored interactions. This is particularly true in the BFSI sector, where customers expect products, services, and communication to be relevant to their individual needs and financial goals.
A study by Accenture found that 75% of consumers expect brands to personalize their experiences, highlighting the growing demand for tailored interactions. This is particularly true in the BFSI sector, where customers expect products, services, and communication to be relevant to their individual needs and financial goals.
4. Banking Process Automation
While financial institutions benefit from improved efficiency and cost savings through Robotic Process Automation (RPA), its true potential lies in its ability to fuel frictionless customer loyalty. By automating repetitive tasks across critical processes like:
Customer onboarding
Accelerate account opening and eliminate tedious paperwork
Loan processing
Simplify loan applications and expedite approvals
Card processing
Streamline issuance and activation processes
Fraud detection
Respond to issues swiftly and protect customer accounts
KYC (Know Your Customer)
Ensure regulatory compliance without compromising customer experience
Account closure
Close accounts promptly and hassle-free
Rewards redemption
Make redeeming rewards quick and convenient
RPA eliminates friction points within the customer journey, fostering a seamless and positive experience. This, in turn, translates to increased customer satisfaction, trust, and ultimately, loyalty. Satisfied customers are more likely to
- Remain loyal: Loyalty programs become even more effective when paired with efficient operational processes
- Recommend to others: Positive experiences become positive word-of-mouth, attracting new customers
- Engage more actively: Frictionless processes encourage customers to utilize more services and products
5. Sustainable Practices
Customers today are very well aware of the environmental threats and issues we are grappling with. In order to create a better environment for future generations they are making sustainable life choices and prefer engaging with brands that have adopted environment-friendly and sustainable practices too.
A few use-cases of sustainability in BFSI include:
A few use-cases of sustainability in BFSI include:
Digitization
The BFSI industry has implemented this in multiple ways to drive customer retention and loyalty. The shift to online statements, transactions, ATM cash withdrawals are all examples of sustainable practices to reduce paper waste. Not only are this new methods environment friendly and sustainable, they also save a lot of laborious work and work hours creating a more sustainable and fulfilling work-life for people employed in the BFSI sector.
Special personalized offers
Today the BFSI sector is launching and driving initiatives that are encouraging the end user/customer to make more environment friendly life choices. A case in point, banks and financial institutions are motivating customers to make more sustainable choices is by offering special subsidized interest rates on electric vehicles and eco-friendly appliances. institutions can incentivize and provide attractive interest rates to customers planning to buy electric vehicles and energy efficient appliances. Financial institutions can even partner with auto dealers and retailers and get their customers exclusive deals and special discounts on purchase of these products.
Sustainable practices will continue to see an upward trend and brands with a sustainability-first approach will be successfully able to engage and retain customers.
6. Building Trust and Transparency
In today’s digital age, transparency is no longer a luxury, it’s a necessity for any financial institution seeking to build lasting customer loyalty. Gone are the days of opaque policies, hidden fees, and ambiguous communication. Customers today are savvier, more informed, and demand a level of openness that fosters trust and empowers them to make informed decisions.
Think of transparency as the currency of the future in BFSI. Openness in policies, fees, and communication acts as the bedrock of a strong customer relationship. It cultivates a sense of security and accountability, demonstrating that financial institutions are not just after transactions, but genuinely invested in their customers’ well-being.
Think of transparency as the currency of the future in BFSI. Openness in policies, fees, and communication acts as the bedrock of a strong customer relationship. It cultivates a sense of security and accountability, demonstrating that financial institutions are not just after transactions, but genuinely invested in their customers’ well-being.
Final Words
The BFSI industry is going through exciting times. However, customer centricity remains a key deciding factor for institutions when it comes to technology investments, automation, and digitization of its core processes. The upcoming trends also clearly indicate as to why loyalty management should be one of the key strategic initiatives banks and financial institutions should be undertaking in 2024.
The two primary tenets of customer loyalty in the current business landscape are emotional engagement and an omnichannel communication strategy. As the BFSI industry continues to re-invent to keep themselves abreast of the ever-evolving customer expectations what they truly need is a robust comprehensive solution for loyalty management. No matter how complex and diverse the front-end gets, the back-end execution of loyalty programs needs to be simple, comprehensive, and connected.
The two primary tenets of customer loyalty in the current business landscape are emotional engagement and an omnichannel communication strategy. As the BFSI industry continues to re-invent to keep themselves abreast of the ever-evolving customer expectations what they truly need is a robust comprehensive solution for loyalty management. No matter how complex and diverse the front-end gets, the back-end execution of loyalty programs needs to be simple, comprehensive, and connected.
LPaaS by EasyRewardz – Simplifying and Driving Loyalty in BFSI
Hyper-personalization remains the key enabler to drive customer loyalty across the value chain in the BFSI industry. Financial institutions can leverage customer insights to identify the most relevant touch points in the customer journey and recommend the most relevant products and services.
LPaaS by EasyRewardz empowers brands to seamlessly manage and simplify their loyalty programs.
Instead of struggling with complex infrastructure and resource allocation, LPaaS offers a flexible, cloud-based solution that enables them to:
LPaaS by EasyRewardz empowers brands to seamlessly manage and simplify their loyalty programs.
Instead of struggling with complex infrastructure and resource allocation, LPaaS offers a flexible, cloud-based solution that enables them to:
- Share exclusive deals and compelling offers: Deliver personalized rewards and incentives tailored to individual customer profiles, ensuring relevance and engagement.
- Deep segmentation capabilities: Leverage customer behaviour to segment them basis their preferences, and financial goals, creating targeted campaigns that resonate.
- End-to-end customer engagement: Onboard, engage, and delight customers at every step of their journey through personalized rewards, gamification elements, and real-time interactions.
LPaaS provides a comprehensive suite of features, including:
White labelling
Customize the program to match your brand identity and seamlessly integrate it into your existing ecosystem.
Plug-and-play API integration
Integrate LPaaS with your core banking system and other applications for efficient data exchange and automation.
Offer management system
Easily manage and modify reward offerings, track campaign performance, and gain valuable insights.
With LPaaS by EasyRewardz, financial institutions can simplify their loyalty programs, optimize resources, and unlock the full potential of customer engagement. Experience enhanced operational efficiency, improved customer satisfaction, and ultimately, drive sustainable loyalty and growth in the BFSI sector.
Want to simplify your loyalty program and build stronger customer relationships? Contact us today to learn more about LPaaS!
Want to simplify your loyalty program and build stronger customer relationships? Contact us today to learn more about LPaaS!
