How can financial institutions design a loyalty rewards program that doesn’t just hand out points but actually builds lasting relationships, drives growth, and keeps your card top-of-wallet?
ampliFI CEO Mike Knoop has shared perspectives on this throughout the year, and together they answer some of the biggest questions banks and credit unions are asking.
Why are loyalty rewards so critical for card acquisition and retention?
Cardholders are clear about what matters: 85% say rewards influence which card they select, according to the June 2025 Velera Payments Index.
“That makes rewards a make-or-break factor for acquisition,” says Mike. “But rewards aren’t just about pulling members in—they’re the key to keeping them. The right program makes your card competitive on day one, while ongoing value through relevant, everyday categories keeps it top-of-wallet. When cardholders feel recognized through personalized offers, they stay engaged for the long haul.”
How can loyalty rewards drive growth beyond just card spend?
For many issuers, rewards are siloed to card transactions. But loyalty has the power to connect across your entire product suite.
“Enterprise engagement means rewarding members not just for using your card, but for opening loans, growing deposits, or hitting savings goals,” Mike explains. “On the redemption side, members can even use points to reduce loan rates or offset closing costs.”
The takeaway? Rewards programs that connect across products build deeper engagement and improve long-term profitability.
How do loyalty programs build lifelong member relationships?
“The earlier you connect with a consumer, the stronger the foundation,” Mike points out. “Bankrate reports that the average American keeps their first checking account for 19 years. That’s nearly two decades of opportunity to build connections. Loyalty programs can reinforce that relationship at every milestone: first debit card, first job with direct deposit, first credit card, even a first mortgage.”
The Summer 2025 Primax Payments Pulse highlights that younger consumers, especially Gen Z, are already using debit more actively at wholesale clubs and retailers—early opportunities for engagement that can create lifelong loyalty.
What do Millennials and Gen Z expect from loyalty programs?
These younger generations control a growing share of spend, and they expect more than cookie-cutter programs. They want:
- Simplicity: Real-time redemption like Pay With Points, where a text reply instantly covers a purchase.
- Personalization: Rewards that fit their lifestyle, whether that’s householding points, digital-first experiences, or milestone bonuses.
- Purpose: Programs that reflect their values, from financial wellness to shared family goals.
Millennials now account for 26.8% of U.S. retail spend, or nearly $1.93 trillion annually, according to Nasdaq data cited in the Summer 2025 Primax Payments Pulse. Programs that meet them where they are—digitally and emotionally—convert rewards from a “perk” into a strategy for building long-term trust.
What’s the link between reward redemptions and account growth?
Redemptions aren’t just the happy ending—they’re the engine of engagement. Data shows redeemers spend 2.7x more annually, retain at a 9% higher rate, and are three times less likely to lapse. Real-Time Rewards users in particular spend 5–10% more than cashback-only redeemers, according to the Velera Payments Index.
The same report shows Millennials and Gen Z redeem at much higher rates than Boomers or Gen X, proving that redemption activity is directly tied to engagement and growth. Making redemption easy, relevant, and rewarding turns occasional users into loyal advocates, driving sustainable account growth.
Mike says it best: “For banks and credit unions, the opportunity is bigger than points—it’s about building reciprocal, meaningful relationships. Loyalty is no longer a side benefit. It’s a strategy for acquisition, retention, and lifetime growth. By aligning rewards with real behaviors and real needs, financial institutions can position themselves as trusted partners through every stage of the consumer journey.”
Ready to lock in loyalty?
Sources:
Velera Payments Index, June 2025.
Summer 2025 Primax Payments Pulse