Pulse Perspective
Financial Services
The next competitive advantage in cards won’t come from better rewards.
Reward propositions continue to improve, but they are becoming increasingly difficult to differentiate. We believe the next source of advantage will come from recognising customer intent earlier, and responding while the moment still matters.
Executive summary
Three industry shifts are changing card loyalty
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Reward propositions are converging.
Cashback, travel benefits, merchant-funded offers and premium experiences remain important, but are increasingly expected rather than differentiated.
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Customers value relevance over reward value.
Research suggests customers place greater importance on relevance, timing and visible value than on accumulating larger rewards. Accenture found that 71% of consumers believe traditional loyalty programmes do not create loyalty.
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Relationships matter more than transactions.
Leading banks are beginning to reward customers across their broader relationship, rather than optimising individual products in isolation.
Our perspective
The next advantage may not come from another reward mechanic. It may come from recognising the next customer decision before it happens.
Why this matters
Historically, card programmes competed by making their proposition more attractive. Increasingly, they will compete by becoming part of more customer decisions.
Rather than rewarding completed transactions, loyalty can begin to influence future behaviour. This creates room to move on the metrics that matter:
- Increase primary card usage
- Capture greater share of wallet
- Grow overseas spend
- Strengthen premium propositions
- Create subscription revenue
- Deepen customer relationships
The Pulse view
Customers continuously reveal what they’re about to do
- A holiday.
- A house purchase.
- A salary increase.
- A new business.
These signals often appear days or weeks before the customer makes their next financial decision. Today, most programmes reward the decision after it happens. Tomorrow’s leaders will compete by recognising the opportunity while it is still open.
The objective isn’t to reward more transactions. It’s to influence more decisions.
Recognising travel intent
Commercial impact
The scenario above shows the mechanic. By recognising the intent rather than the transaction, a single moment compounds across the portfolio:
- Greater share of wallet
- Increased primary card usage
- Higher overseas spend
- New subscription revenue
- Stronger customer relationships
Five questions every Head of Cards should be asking
Which customer decisions matter most to our portfolio?
Which signals already exist but rarely trigger action?
Where are we rewarding completed behaviour rather than influencing future behaviour?
Which moments create the greatest opportunity to increase share of wallet?
If our programme could recognise intent continuously, which decisions would we trust it to influence?
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