Consumers see banks jazz up loyalty rewards, travel deals for endemic era

Singapore

CONSUMERS can look to benefit from banks competing for their dollars with new forms of rewards programmes and travel-related services as Singapore transitions to an endemic Covid-19 reality.

What does the new normal entail for consumers? More rewards redemption options, air miles that never expire, and travel deals that include PCR tests, to name a few.

Citi had recently tied up with Grab to give Citi cardmembers in Singapore more flexibility to convert their points or miles to GrabRewards points, which can be used to redeem ride or delivery vouchers and offset in-store purchases.

This can be done seamlessly with no conversion fees. In a statement, the bank said the partnership was partly in response to cardmembers' feedback on wanting more rewards redemption options.

With air travel only gradually resuming, OCBC's 90°N travel credit card offers users more flexibility to choose their rewards; points can be redeemed for miles, cashback, or shopping vouchers.

Users can also earn more points in spend categories that have peaked in recent times, such as travel, food delivery and subscription of online streaming services.

Meanwhile, UOB has partnered deals marketplace Fave to double the number of merchant locations in the bank's rewards programme on its new digital platform, UOB TMRW.

UOB customers can also track the amount of credit card reward points they earn with every purchase.

The lender said this changes the traditional banking rewards experience, which gives consumers a summarised view of their consolidated rewards points, making it difficult for them to reconcile their spend with their rewards points earn rate.

Artificial intelligence (AI), machine learning and data analytics are also used to personalise the reward experience for each customer.

The bank's backend engine is able to learn from the customer's transaction and reward redemption patterns to recommend relevant deals and provide personalised prompts to help customers spend and save more wisely, to name a few examples.

More than ever, the personalisation of products and services is a growing consumer expectation that banks have to navigate.

Thanks to the pandemic, the accelerated shift to digital channels comes with greater willingness from consumers to share data in exchange for better services, personalised offerings or reduced costs.

But the trade-off is that the better services that consumers are seeking run far deeper than just ad-targeting or recommended products, said Barbara Crane, partner in financial services advisory at KPMG Singapore.

This is in line with trends where consumers have become less brand loyal. "If banks do not have a differentiator in terms of how they reach out to their customers in a personal manner digitally, they will be compared against other metrics like interest rates and rewards," Crane told The Business Times.

Personalisation that helps maximise functional benefits linked to products such as loyalty programmes are particularly valued by Singapore consumers, a recent EY report found.

Consumers are also keen for their primary bank to partner with other providers and/or high-tech companies to expand their products and services; about 3 in 4 surveyed said that such partnerships would make them value their bank more - even more so for Gen Zs and millennials.

"Stronger personalisation capabilities, seamless integration of activities, and ecosystem business models are essential for banks to maintain their customer relationships and chart a viable path to growth," said Andrew Gilder, EY Asia-Pacific banking and capital markets leader.

With the opening of more international borders, banks are beefing up their travel-related services as demand for flights and hotels rise.

OCBC will roll out a new travel platform for customers to book airline tickets, hotels and car rentals - as well as Covid-related travel insurance and PCR tests - all within a single portal.

Big data will be used to rethink travel experiences, such as by analysing booking patterns to match users to the best hotels and flights.

DBS has launched a new "Traveller Kit", on top of its existing travel marketplace, featuring over 700,000 deals, Covid-19 travel insurance, PCR test booking and travel advice.

There is complimentary travel insurance coverage of up to S$200,000 which will include Covid benefits in January next year.

Customers can further activate the "Travel Mode" feature on their DBS mobile banking app which provides personalised insights such as foreign-exchange reminders and safe travel guide and tips. More than 102,000 customers have activated this service in over three months.

KPMG's Crane noted that mobile channels may well become the main form of interaction for financial services. "Consumers will expect to be able to access multiple services that cut across sectors at the touch of a button, such as a combination of travel and insurance."

AI-powered live assistance has also become a standard expectation to increase speed and efficiency, as consumers increasingly value their personal time, she added.