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Why banks should invest in cross-product customer loyalty programs

Authors

  • Jason Martin

    Principal, Banking and Capital Markets, Business Consulting, Ernst & Young LLP US

  • Steve Reiter

    Managing Director, Consumer Banking Consulting Leader, Ernst & Young LLP US

Contributors

05 minute read 06 Nov 2025

Banks can boost customer retention and wallet share by creating and rewarding long-term loyalty.

In brief
  • Customer loyalty is more important than ever to drive organic growth for banks. 
  • Current loyalty programs and one-time promotions do not drive long-term engagement. 
  • Customer-based, cross-product loyalty programs can significantly improve retention, promote engagement and drive deeper relationships.

In an era when money can be moved with a few taps on a mobile phone, bank customers today have a wealth of options to meet their financial needs. Like other retailers and brands competing to attract and retain customers, banks have jumped on the loyalty program bandwagon. And for good reason: rewards are popular. Ninety-two percent of consumers are signed up for at least one loyalty program, and 50% are in more than five.¹ However, from a customer perspective, these offers typically fall into the “take the money and run” category, failing to foster the long-term engagement that banks desire.

How EY can help

Common pitfalls of traditional bank loyalty programs

Current loyalty initiatives tend to focus on single products and transactional benefits, which do little to create the “sticky behavior” needed to enhance customer retention. This lack of engagement not only fails to reduce attrition but also does not motivate customers to consolidate their financial assets with a single institution. To break this cycle and foster long-term customer relationships, banks need to adopt more comprehensive, cross-product loyalty strategies that value the full customer relationship.

 

As customer-level enterprise programs are relatively new to banks, they can look to other industries for inspiration. For instance, the 2025 EY Loyalty Market Study found that 54% of consumers appreciate birthday gifts and recognition, suggesting that banks could leverage special occasions to deepen customer engagement. Just as airlines offer bonus miles on customer birthdays to create memorable experiences, banks can adopt similar strategies to foster loyalty.

 

One leading US bank discovered that aligning growth objectives with genuine customer value can significantly improve retention rates. In Q4 2024, this bank’s loyalty program achieved an impressive 99% annual retention rate,² far surpassing the industry average of 75%.³ Though bank product portfolios are often complex and difficult to modify, it’s essential for banks to manage single product offerings and align product features with the goals of customer loyalty programs. This alignment will challenge lines of business but also provide opportunities to simplify the product offerings while providing more meaningful customer engagement.

Key steps to effective bank loyalty program implementation

Transitioning to a comprehensive cross-product loyalty program offers clear advantages. However, implementation can be challenging. Success requires careful planning and coordination across six areas:

Key focus area

Common challenges

Solutions

Product and customer alignment

Banks typically have complex and siloed product offerings, various segmentation structures, and ongoing roadmaps that require diligent consideration when building future state loyalty programs.

● Involve product owners early and often in the design of the loyalty program to address potential overlaps, future state ownership and to simplify processes across segmentation/tiering considerations.

● Establish a program structure that allows front-office staff and marketing teams to clearly communicate rewards benefits to customers, enhancing their experience and reducing confusion.

Technology integration

Banks’ reliance on legacy infrastructure for product-centric loyalty programs makes it difficult to build and integrate modern, cross-product solutions and share data across multiple banking channels. Outdated batch processes and fragmented marketing tools further limit timely engagement and personalization.

● Leverage third-party vendors and modern platforms to streamline integration, allowing timely data processing and advanced analytics.

● Integrate marketing tools to personalize communications and automate ongoing calculations, while maintaining regulatory compliance and operational efficiency.

Data integration

Fragmented data and siloed customer records prevent a unified view of the customer, making it difficult to capture the full scope of the relationship. This limitation hinders personalization and complicates the tracking of engagement and the definition of program KPIs.

● Build loyalty programs on robust data foundations by linking customer master records to relevant accounts, developing transaction and balance data that is transparent and accessible, and supporting key operations like lookbacks and dispute resolution. 

● Use KPIs and detailed reporting to demonstrate program value.

Governance

Enterprise-wide and cross-product alignment poses significant challenges due to complex product interdependencies in the current state, the lack of available resource capacity, competing priorities among lines of business, and varying profit and loss considerations.

● Maintain regular top-down executive alignment through consistent forums such as the steering committee.

● Implement documented resource planning.

● Implement robust program management leveraging risks, assumptions issues, dependencies and decisions (RAIDD) tracking, status reporting and change management forums.

● Set clear periodic performance metrics.

Controls

The holistic nature of cross-product loyalty programs complicates control and risk ownership, identification, and development. Enterprise, product and line of business stakeholders must be consulted to adequately mitigate risk for the new rewards processes.

● Perform thorough reviews of underlying processes to verify the accuracy of existing documentation and to identify new risks to the bank arising from benefit delivery, technology development and customer interactions.

Legal, risk and compliance

Given the numerous individual bank products that could be included in a loyalty rewards program, the various legal, risk, compliance and fair lending factors require careful attention to confirm that the collective program is effective and adheres to regulatory standards, including anti-tying laws.

● Engage legal, risk and compliance partnerships early and frequently with designated contacts across required product areas.

● Implement risk frameworks to anticipate challenges and maintain strong controls to meet policy and regulatory requirements. 

● Hold regular reviews to help keep programs current with evolving regulations and business needs.

The shift to comprehensive cross-product customer loyalty programs is underway, marking a significant departure from traditional product-centric models. By focusing on these six pillars, banks can lay the groundwork for robust loyalty programs that attract new customers, foster long-term relationships and enhance overall customer satisfaction.

Kristen Lavallato, Senior Manager, Ernst & Young LLP; Danny Barlok, Senior, Ernst & Young LLP; and Alexandra Fortune, Senior, Ernst & Young LLP were contributors to this article.


Summary 

Banks can significantly boost customer retention and wallet share by investing in comprehensive cross-product loyalty programs. Unlike one-time promotions, these programs foster long-term relationships, encourage meaningful engagement and provide flexible rewards across products. Key success factors include aligning product strategies with customer needs, integrating data and technology, and maintaining strong governance and compliance. By focusing on holistic customer value throughout the lifecycle, banks can differentiate themselves and drive sustained growth and satisfaction.

About this article

Authors

  • Jason Martin
    Principal, Banking and Capital Markets, Business Consulting, Ernst & Young LLP US
  • Steve Reiter
    Managing Director, Consumer Banking Consulting Leader, Ernst & Young LLP US

Contributors

Related topics
Banking and capital markets
Banking transformation
Financial services

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