The New Frontier in Middle East Banking: Winning with Personalized Card Rewards

10 January 2024

Explore how Middle East banks leverage personalization and merchant-funded rewards to enhance customer loyalty and ROI, differentiating their offerings without inflating budgets in a competitive market.

Maximizing Impact: Innovative Card Products Within Budget Constraints

“How do I make my Card Product stand out in a Competitive Market without increasing my CVP Budget?” 


The Middle East is well known for the generous rewards and benefits packages that come with each credit card. As each Bank wants to stand out, increased catalogues of lavish benefits are introduced, putting pressure on CVP budgets and overall profitability.


Rounds of golf, Airport lounge access, Airline Miles, Cashbacks, Valet parking, Gym visits, Dining offers, Cinema tickets and more are some of the perks expected by prospective cardholders. With a population of under 10 million citizens and residents, and over 50 Domestic and Foreign banks vying for their custom, it is no wonder that we have reached a point where something must change.

But how? Pulse iD believe that hyper-personalisation of the rewards and benefits offered to each cardholder can help to redress the balance, giving the customer choice that is relevant and meaningful to them, whilst making better use of the CVP budget by not giving everything to everybody, regardless of if they will use it.

Personalization: Boosting ROI Amidst UAE’s Banking Rewards Competition

In the most recent Q1 2023 market analysis, projections indicate that the Loyalty Market in the UAE is on a robust growth trajectory, set to expand from $1275.7 Million in 2021 to an impressive $2248.0 Million by 2026. The Emirati landscape has witnessed an uptick in the embrace of loyalty programs across various business sectors, from burgeoning e-commerce platforms to traditional brick-and-mortar retailers. This widespread shift towards loyalty initiatives is driven by a combination of factors: heightened market competition, evolving consumer preferences, and rapid technological advancements. The looming inflation shadows are expected to further fuel the popularity of loyalty programs. With the broader economic context in view, Emirati consumers are on the lookout for enhanced value for their regular expenditures.

Mirroring this trend, the banking sector in the UAE is in the midst of a competitive whirlwind. 

Known for its flourishing economy and tech-savvy populace, the UAE houses several banks that vie for a substantial share of the market. Banks such as Emirates NBD, HSBC, First Abu Dhabi Bank (FAB), and ADCB offer diverse rewards programs that include travel miles, cashback, and lifestyle perks. Most banks now offer so many different card products, it is hard to decide on the best one for each cardholder.

As more banks jump onto the rewards bandwagon, the uniqueness of such programs diminishes. 

Traditionally, rewards programs are seen as necessary expenses that banks incur to retain customers. As these rewards programs become more intricate and expansive, they bring along a rising cost factor. 

Understanding the ROI Dilemma: How can banks ensure their rewards program remains distinctive while keeping costs in check?

For instance, offering extravagant travel rewards might appeal to a segment of customers but could be unsustainable in the long run due to high costs and low engagement from other customer segments.
This escalating financial commitment is pushing banks to rethink and recalibrate their strategies, all in the quest for achieving a sustainable ROI.

Personalization as a Game-Changer
Personalizing rewards can significantly amplify customer engagement. For example, a 2020 study by Accenture highlighted that 91% of consumers prefer brands that provide personalized offers. By analyzing customer spending behaviors and transaction data in real-time and tailoring rewards accordingly, banks can ensure higher redemption rates and satisfaction. The power of one carefully targeted and relevant offer being received by a cardholder is far greater than offering them a laundry list of offers to sift through.

Leveraging Merchant-Funded Rewards
Merchant-funded rewards programs can be a cost-effective strategy for banks. In such programs, the cost is shared between the bank and partner merchants, thus reducing the financial burden on the bank. The challenge of merchant-funded rewards has always been how to ensure payment is made with the required card, relying on clumsy processes and merchant staff to police this. Combining merchant-funded offers with card-linking (CLO) ensures payment using the required card and requires zero interaction to claim the discount. Pay using your bank card and receive the cashback onto your card. Studies show that this creates card usage habits, leading to greater transaction volumes.

The time is ripe for innovation in the rewards space. As banks grapple with escalating costs and increasing competition in rewards programs, the synergy of personalization and merchant-funded rewards emerges as a strategic solution. By strategically investing in these areas, banks can ensure sustained customer loyalty while maintaining a healthy ROI.

If you want to transform the banking experience and re-imagine what is possible with a new generation of cardholder experiences, get in touch!

From merchant-funded rewards programs to hyper-personalized offers and gamification, Pulse iD solutions are powered by a scalable platform, operating with bank-grade security.

Lead the charge in shaping a new era of customer-centric, cost-effective rewards programs.