Loyalty programs have become powerful tools for banks and credit unions to drive engagement, retention, and growth. And who better to learn about the strategic use of loyalty rewards than from someone with decades of experience in the loyalty and financial sectors?
In this loyalty program Q&A, Mike Knoop, CEO of ampliFI Loyalty Solutions, shares 4 actionable insights to help your institution personalize rewards, innovate, and optimize your program to boost cardholder loyalty and stay competitive.
Loyalty programs are often viewed as “nice to have,” but their potential goes far beyond that. Why should banks and credit unions view their loyalty programs as strategic assets?
“Loyalty and rewards programs are more than just a perk for cardholders—they’re a strategic asset that can drive engagement, retention, and growth. When designed thoughtfully, these programs help differentiate your institution and strengthen long-term relationships.
For example, aligning rewards with how your cardholders already spend—whether on groceries, travel, or everyday purchases—maximizes the program’s relevance. When rewards resonate with a cardholder’s lifestyle, they see more value and are more likely to engage frequently.”
In a crowded marketplace where loyalty is hard-won, the ease and variety of reward redemptions can make or break a program. How does the redemption experience in a loyalty program impact cardholder engagement?
“A simplified redemption process is crucial. Complex rules can frustrate consumers, leading to disengagement. The easier it is for them to redeem rewards, the more likely they are to stay active in your program, which boosts satisfaction and drives repeat usage.
We also know that diverse redemption options are a major attraction for consumers. We’ve seen that cashback-only programs result in low engagement and high costs, whereas loyalty programs that integrate redemptions like point-of-sale, experiential, merchandise, and more see higher engagement and retention. This is because diverse redemption options allow cardholders to choose what they redeem for, personalizing the experience in a simple way.
We recently completed a case study that examined the return on investment of diversifying redemption portfolios. We observed a 54% decrease in cashback redemptions and a 53% increase in Pay With Points usage after a previous cashback-only client integrated Pay With Points. Cardholders want to choose!”
Competition in the financial landscape grows every day. How can loyalty programs drive business growth and help banks and credit unions stay competitive?
“A high-quality loyalty program directly impacts key business metrics. For instance, ampliFI’s clients see 14% higher cardholder activity, 133% higher credit purchase volume, and 130% higher debit purchase volume than industry averages. These results highlight how powerful loyalty programs can be in driving growth.
But it’s not just about numbers—staying competitive requires adapting to evolving consumer expectations. Nearly half of consumers now expect personalized, tech-forward financial experiences. Financial institutions need to innovate with user-friendly loyalty features to stay relevant. By adopting a holistic approach, such as combining debit and credit rewards or incentivizing actions like taking out loans or signing up for e-statements, you can deepen relationships and create long-term loyalty.”
What’s the future of loyalty programs for banks and credit unions?
“The future of loyalty programs is all about innovation, personalization, and deeper engagement. As consumer demands grow, financial institutions must push beyond the traditional models and offer rewards that reflect the evolving preferences of their cardholders. This means creating experiences that feel tailored to individual behaviors, whether that’s through dynamic reward categories, real-time redemptions, or seamless integrations with digital wallets and apps.
Personalization will be key—offering cardholders more control over how they earn and redeem points, and aligning rewards with their lifestyles. For example, the ability to customize reward categories based on spending habits or even seasonal preferences will drive higher engagement and loyalty.
Ultimately, the future of loyalty programs is about delivering value that goes beyond points and rewards—it’s about fostering meaningful, fruitful partnerships with cardholders that drive growth for the institution.”
Ready to foster loyalty and engagement at your institution? Contact us at sales@amplifiloyalty.com to schedule a consultation with our experts and drive success together.