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Rethinking the customer-first approach to banking with digital rewards

Financial institutions can leverage artificial intelligence and machine learning to provide unique, personalized experiences to each customer.
By Laura Kelley, Valuedynamx

Published July 22, 2022

A group of experts got together at the NCR VOYIX Summer Summit to discuss how rewards programs can help financial institutions stand out by creating personalized, customer-first experiences.

Traditionally, the term “customer-first” summarizes business processes where customers are at the center of every decision. COVID-19, and the resulting changes in everyday behaviors, has forced businesses to reexamine their customer-first approach. Financial Institutions (FIs) are not excluded; instead, they have a real opportunity to rethink their customer-first approach with digital rewards programs

With this changing environment in mind, I regrouped with the panelists from NCR VOYIX’s Summer Summit to talk more about what’s new and what’s next.

Watch the Summer Summit here to learn more.

Ed, during the Summer Summit, you spoke about a range of topics along the innovation theme, including personalization, data, relevancy and member engagement. Now that we’re three months out and heading into the holiday season, what unique opportunities do FIs have to create customer-first experiences?

When you look at the banking industry, you’ll see a lot of innovation at play. From neobanks to frictionless payments to cryptocurrency, the landscape is quickly changing. The definition of personalization is also evolving as the technology and data management behind serving up relevant offers evolves.

This poses a particular challenge with meeting consumers where they are but is crucial to making sure any rewards program provides the relevant content they want. To be successful, FIs should focus on developing the right partnerships to present content that appeals to various demographics—partnerships that recruit relevant offers across local, national and online (D2C) merchants. It also includes bringing in up-and-coming content, such as travel, at the right time as the landscape evolves. And content that is relevant to the season, such as holiday shopping offers.

As the market continues to grow, NCR VOYIX and Collinson are excited to be bringing financial institutions a rewards program that can provide the right mix of well-known and local, community-based offers that will enhance the customer experience and keep people engaged.

Steve, now that we’ve started to roll out rewards to FIs across the NCR network (with 350 to be onboarded by the end of the year), who do you think the most active users will be to start?

Based on client feedback, I believe the program will appeal to all cardholders given its broad array of offers and deals. However, I think it will be particularly attractive to the younger generations. I say this because a digital, app-driven rewards program is something that fits into their everyday life and their daily use of all things digital. We know that a strong reward or a good deal will influence spending behavior as industry studies reveal that 72% of millennials will use their card to shop if the cash back is 5% or more. And 81% of members of Generation Z say a personalized rewards program can deepen their relationship with their bank or credit union.

That said, the COVID-19 pandemic has changed shopping habits for all consumers in the ways they shop and save. One study found that more than 50% of consumers plan to continue using digital banking post-COVID, and many plan to continue ordering to-go or online. Giving them the option to gain cash-back rewards right at their fingertips— in places they already frequent—will help drive loyalty and card usage across generations.

And what can FIs expect to see in the future?

Great question. To stay competitive and relevant, it’s important that rewards programs continually evolve based on consumer demand and changing behaviors. Some future features of a best-in-class program could include:

1. More personalization, giving cardholders the option to select and activate offers of their choice based on their spending habits.

2. New, relevant offers and categories such as travel or local deals that help cardholders better plan for the future or discover their next favorite restaurant.

3. Fresh content on the platform that’s regularly updated and presented to cardholders, driving engagement and excitement to see what’s new.

Mitch, it’s obvious that having the right mix of content will benefit not just end users but also FIs and merchants in their communities. How do you see this local connection being met?

In my experience, local offers are a “win-win” for all. Merchants benefit from more traffic. Users benefit from saving while supporting and discovering new local merchants—some of whom may also be their friend or neighbor. And for FIs, local offers are another differentiator that highlights why they’re a trusted partner for community-minded consumers and businesses.

JoAnn, given your experience with multiple rewards programs, how do rewards programs assist banks and credit unions in keeping closer to their customers and members?

Putting customers first is not a new idea, but how it’s delivered is constantly evolving. It may be ensuring that they have banking tools at their fingertips, they get a great interest rate, or that they can easily and quickly access a banking professional to answer their questions. Another way to put customers first is to provide them with benefits that make them want to continue their banking relationship with you now and into the future. Reward programs help to do this by leveraging artificial intelligence and machine learning to provide personalized experiences as unique as each of your users. The result is a program that delivers real, tangible value to the customer that keeps them coming back.

Related: Digitally delight banking customers for the win

Perhaps most importantly, rewards give FIs another reason to engage with their customers or members and be part of their daily thinking. It’s not just about cash back, but it’s about communication, especially at relevant times in their day-to-day lives.

To that end, we work closely with NCR to ensure our clients have the tools they need to enable communications, promotions and offers at their fingertips.

It is clear that, for financial institutions to keep up with current users’ changing needs and expectations and to attract new, younger consumers, they’ll need to expand their digital capabilities. Implementing a rewards program is one step closer to meeting consumer demand. With the right mix of offers, all end users will have access to content they find relevant, compelling and rewarding, leading to repeated use of the program. This will keep your customers and members engaged with your institution and your card top of wallet.

NCR Summer Summit panelists include Laura Kelley, Associate Director, B2B Marketing, Valuedynamx Steve Landuyt, SVP, Global Sales Director, Valuedynamx JoAnn Redmon, Associate Director, Client Services, Valuedynamx Ed Wogan, SVP, Chief Merchant Officer, Valuedynamx Mitch Jacobs, CEO and Founder, Plink.

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