{"id":52861,"date":"2024-07-10T05:25:09","date_gmt":"2024-07-10T05:25:09","guid":{"rendered":"https:\/\/codeandpepper.com\/?p=52861"},"modified":"2025-08-21T14:14:32","modified_gmt":"2025-08-21T14:14:32","slug":"loyalty-in-fintech-how-can-your-business-push-boundaries","status":"publish","type":"post","link":"https:\/\/codeandpepper.com\/loyalty-in-fintech-how-can-your-business-push-boundaries\/","title":{"rendered":"Loyalty in Fintech – How Can Your Business Push Boundaries?"},"content":{"rendered":"\n

Delivering needed and reliable products and services is not enough anymore. With the current market saturation and over-the-top third-party partnerships enhancing the offer even more, fintech companies are forced by the landscape to search for something extra. This ingredient is called loyalty. By providing actionable insights, your platform can be turned into a lead magnet that combines both fintech and customer incentives.<\/p>\n\n\n\n\n\n\n\n

Loyalty has become a thing in recent years, not only in fintech. Turning users into paying customers is one thing. Making them stay and get them engaged is another<\/strong>. Consumers are getting attached to brands. They are used to features and favorite ways to do things. But as soon as they feel someone does it better, they flee. That\u2019s why implementing loyalty mechanisms in your fintech application is paramount.<\/p>\n\n\n\n

Few statistics to get the point across<\/h2>\n\n\n\n

Did you know that a staggering 68% of consumers feel no loyalty to any of the fintech brands?<\/strong> 26% of responders express distrust towards fintech services, and 38% did not yet engage with fintech companies.<\/p>\n\n\n\n

At the same time, 57% of respondents surveyed consider sign-up incentives and loyalty rewards to be influential factors in their choice of fintech service providers<\/strong>, with 19% of consumers more likely to try a fintech product or service if they are offered an incentive or it has an associated loyalty program. At the same time, gift cards stand out as the most universally attractive form of reward across all demographics, with an overwhelming 68% of consumers considering them as an enticing reward or incentive – especially when users can conveniently print card online<\/a> <\/strong>for immediate use.<\/p>\n\n\n\n

These conclusions come from the study called “Bridging the Loyalty Gap: Consumer Insights for Fintech Engagement and Growth” by Tillo<\/strong>. You can download it here<\/a><\/b>. There\u2019s a big potential for consumer education and growth. What companies need to do is to figure out what type of incentive works best for their audience, and how to structure a loyalty program in the first place.<\/p>\n\n\n\n

But there\u2019s another dilemma that companies need to face. What type of loyalty model do they want to implement?<\/strong><\/p>\n\n\n\n

What is loyalty in fintech, anyway?<\/h2>\n\n\n\n

We all know cards, coupons, stars, points, etc. But there is another trend that has emerged. It\u2019s called loyalty-as-a-service (LaaS<\/strong>). The difference between standard loyalty programs and LaaS is that fintech companies utilize LaaS providers to create and manage their loyalty programs. They don\u2019t create, develop, and run them. They act as a supervisor that demands effects. <\/p>\n\n\n\n

Benefits of having a loyalty program in fintech<\/h2>\n\n\n\n
  1. The major benefit of that approach is a focus on core products and services while having a functional and performing program at the same time<\/strong>. It\u2019s especially important for startups and scaleups that don\u2019t necessarily have the manpower and bandwidth to do everything on their own but want to implement extra features nonetheless.<\/li><\/ol>\n\n\n\n
    1. Another benefit is gathering, processing, and drawing conclusions based on user data<\/strong>. Fintechs have them in spades but having access to enhanced consumer data and analytical models makes the day for many companies out there.<\/li><\/ol>\n\n\n\n
      1. The next one is pretty self-explanatory. Having a loyalty program gets you increased user engagement<\/strong>. They can apply for credit, exchange currency with a fee, buy insurance, etc. They also log in more frequently, getting familiar with and attached to the brand itself.<\/li><\/ol>\n\n\n\n
        1. Successful engagement strategies in FinTech loyalty programs include personalized rewards, interactive features, and smooth user experience<\/strong>. History, spending patterns, and financial goals are important to create a rewards system that satisfies each customer individually. Surveys and progress trackers get people on board and keep them going. Finally, a user-friendly and intuitive approach to UX and UI keeps people visit, even multiple times a day. Get creative!<\/li><\/ol>\n\n\n\n
          1. Driving customer retention<\/strong> is also a thing. According to Podium<\/a><\/b>, acquiring new customers is even seven times more expensive than retaining existing ones. That\u2019s why keeping on board those people you already have is vital for the business. It directly impacts revenue, profitability, and long-term success. Loyal customers will more likely advocate your brand, refer to new customers, provide feedback, and engage with the app.<\/li><\/ol>\n\n\n\n

            Basically, there are three customer retention techniques commonly used in fintech: proactive communication, tiered programs, and gamification of services<\/strong>. By breaking down the system into tiers, you ensure constant engagement. By using frequent communication, you make sure that targeted emails notifications and promotion updates get the message across.<\/p>\n\n\n\n

            1. Another benefit is increased lifetime customer value (LCV)<\/strong>. In other words, it\u2019s the total revenue a business can expect to generate from a single customer over the entire duration of their relationship. <\/li><\/ol>\n\n\n\n

              Companies use user segmentation (based on their value to the business), tiered reward programs and data analytics for personalization.<\/p>\n\n\n\n

              What do you need to adopt a loyalty program in fintech?<\/h2>\n\n\n\n

              Good news is that there are two basic things you need to have. The other side of the coin is that both of them are critical.<\/p>\n\n\n\n

              You need:<\/p>\n\n\n\n