Card-linked rewards programs are giving financial institutions new ways to use transaction data to deliver targeted merchant offers and strengthen customer relationships. Rather than requiring consumers to carry coupons or separate loyalty cards, these programs connect promotions directly to the credit or debit cards customers already use for everyday purchases.
Bank of America is applying this model through BankAmeriDeals, a rewards service powered by Cardlytics technology. Customers receive targeted offers through their banking relationship and earn cash back when they make qualifying purchases with a Bank of America payment card. The program could make online banking more valuable to customers while giving participating merchants a way to reach consumers based on relevant purchasing activity.
Bank of America’s new reward service, BankAmeriDeals, leverages software developed by Cardlytics to offer Bank of America credit and debit card customers increasingly targeted promotions. Deals are redeemed when a customer makes a purchase at a featured merchant using their payment card. The reward is then credited to the customer’s cash back balance.
If the service is successful, Bank of America customers may become more attached to their online banking relationship, and less likely to switch banks..
Customers “don’t have to clip coupons,” Tara Burke, the Bank of America spokeswoman, said. “They’re not [going] store to store to figure out who has the best deal. It’s about deepening relationships with our customers.”
While many customers are likely to appreciate the offers, others will question the practice of a financial institution sharing transaction information with third parties, even if the data is not personally identifiable.
Bank of America’s new reward service, BankAmeriDeals, leverages software developed by Cardlytics to offer Bank of America credit and debit card customers increasingly targeted promotions. Deals are redeemed when a customer makes a purchase at a featured merchant using their payment card. The reward is then credited to the customer’s cash back balance.
If the service is successful, Bank of America customers may become more attached to their online banking relationship, and less likely to switch banks.
Customers “don’t have to clip coupons,” Tara Burke, the Bank of America spokeswoman, said. “They’re not [going] store to store to figure out who has the best deal. It’s about deepening relationships with our customers.”
While many customers are likely to appreciate the offers, others will question the practice of a financial institution sharing transaction information with third parties, even if the data is not personally identifiable.
BankAmeriDeals illustrates how transaction data can be used to make traditional banking relationships more personalized. Instead of offering the same promotion to every cardholder, card-linked rewards programs can deliver offers that are more closely aligned with individual purchasing patterns, potentially making those promotions more useful to customers and more effective for merchants.
The approach also creates an opportunity for Bank of America to increase engagement with its online banking platform. Customers who regularly return to review available deals, monitor rewards, and manage their accounts may develop a stronger connection to the bank, which could ultimately contribute to customer retention.
However, the use of transaction information for targeted marketing also raises questions about privacy. Even when personally identifiable information is not shared with merchants or technology providers, some customers may be uncomfortable with their purchasing behavior being analyzed to determine which offers they receive. Clear communication about how transaction data is used and protected will therefore be important.
The success of card-linked rewards programs will depend on balancing personalization with consumer trust. If BankAmeriDeals can provide relevant savings while giving customers confidence that their financial information is protected, the program could provide Bank of America with another way to deepen relationships and differentiate its card and digital banking services.