Traditional private banking is a money-rich industry with a huge history behind it. But that doesn’t mean that it can’t learn from newer, more innovative solutions – such as online loyalty programs. Today we take a look at four ways in which banks can learn from these upstart business arms.
Paper-based systems are a waste of resources
Paper mail? In 2020?! Yes, it still exists. And yes, traditional banks are still a proponent of this archaic system. While plenty of banks have opt-in for online-based statements, the default is often paper-based snail mail, and you’ll still receive notices and new product flyers from your bank even if you’ve opted in to online-only statements. This is not only ridiculous due to the ongoing delays now very much a part of paper-based mail, but very annoying for people who change their address often, like renters.
Online loyalty programs traditionally have no mail-based component, aside from possibly a mailer for a physical card at the start of entering the programs. Sometimes, these physical cards are only able to be picked up from a particular location, and often, they don’t have a physical card at all.
Mail is as good as dead. Let’s keep it for what it’s really useful for: online shopping. Traditional banks should have mail-based systems as opt-in, rather than opt-out, to keep the oldies happy.
A well-designed website and app is worth every penny
Do banks not want us to do banking? It seems the traditional banking sector trail behind when it comes to customer-facing online infrastructure. While we’ve seen steps taken towards making websites and apps more user-friendly, these changes are slow to roll out, and often lack the options that customers really want – so we’re still spending time on the phone trying to chat to a real person.
On the other hand, tech-savvy retailers are leading the fray when it comes to design. With websites and apps where navigation, payments, account management, and customer service are all smooth sailing, customers are getting used to a particular standard of interaction.
Starbucks is a great example of design done well, both on their website and their app – and a world-leading, worldwide loyalty program. There’s even a Starbucks Rewards Visa Card for account holders to get their hands on with a huge boost in points.
The more integrations the better
Thankfully for most traditional banks, they leverage the services of Mastercard or Visa for customers to do payments. Online and other purchasing is generally made pretty simple if you have a Mastercard or Visa credit or debit card, requiring a tap, a swipe, entering your CCV number, or receiving an SMS or phone notification for validating a purchase. However, if you have to transfer between accounts, or your bank uses Diners Club (or another lesser known banking system), you’ll need to take some time to try and spend your own money. Ridiculous.
Online loyalty program providers know that the easier points are to spend, the more likely people will want to use the program. This includes ease of use, as well as integrations with other providers. For instance, Australia’s FlyBuys program allows customers to shop across a range of different large retailers (both online and in-person) to accrue points for spending on vouchers for these stores, physical goods, frequent flyer points with associated airlines, and more. One in three Australians is an active member of the program. If we take a look at another industry, casinos offer their loyal customers dedicated support, special tailored bonus offers, and even trips abroad as a reward.
Leveraging blockchain for resilient infrastructure
Blockchain is no longer a new technology, however the business applications of this revolutionary tech are only just starting to come to fruition. Traditional banks are exploring blockchain, sure. JP Morgan Chase has a new business division dedicated to its blockchain efforts: Onyx. In fact, they were “the first global bank to create a production-grade, scalable, peer-to-peer blockchain-based network.”
However traditional banks seem set on developing their own technologies rather than leveraging existing blockchain efforts or acquiring fintech blockchain startups for development of new systems. The insular nature of banking contrasts sharply with the distributed, community-involved nature of blockchain as a technology.
On the other side, loyalty programs are jumping on the blockchain train, leveraging this tech to provide customer-friendly loyalty experiences. For example, qiibee is an ecosystem designed specifically for rewards programs. Lattesso, the second largest cold coffee producer in Switzerland, have used the platform to create and manage their Lattesso Coin.