Engage People is a fintech startup providing rewards programs that link together customers, small businesses and banks. Len Covello, chief technology officer of the global technology provider, talked to BankBeat about how reaching people with technology changes during and after the events currently shaking the world.
How do you see the pandemic changing the way community banks look at fintech?
Len Covello: For community banks, the current pandemic will accelerate the adoption of fintech solutions as society becomes more dependent on technology, especially mobile-friendly solutions. Right now, people are looking to their banks to offer security, and having the most up-to-date technology can help alleviate a degree of uncertainty by keeping customers informed and confident in their bank’s viability.
With so many people being isolated, fintech tools are a natural communication tool, and they allow customers to continue paying bills, viewing balances and conducting other banking activities without going into the physical branch, which by-and-large they can’t. The habits learned now will likely carry over post-pandemic, so the number of touch-points with customers is important.
To that end, reward programs continue to keep customers engaged long term and make them feel they are still an important and valued customer in these unprecedented times.
Do you find rewards programs a good fit for community banks?
L.C.: Loyalty programs provide community banks the ability to reward customers for using a bank’s network of affiliates and services in the community.
Loyalty programs are key to helping community banks differentiate and remain competitive by offering something that is typically only available through a larger financial institution. Community banks have the benefit of tying back to local businesses and local events inspiring a broader-reaching connection within the community, which helps increase relevance and an emotional connection with customers. The reward for this connection from the bank’s perspective is increased traffic, business and referrals, as well as overall customer satisfaction.
Loyalty programs are common for airlines. What does a good one look like for a community bank?
L.C.: A good loyalty program starts with defining success, whether that be customer retention or incentivizing signups or credit-card use. With a goal in place, banks can effectively measure and adapt their programs.
As a common denominator, successful programs increase customer communication, engagement and activity — and they link customers to their local communities by providing merchandise or gift cards, or the ability to pay for local products directly with loyalty points. This success is driven by listening to customers and incentivizing them to be active with the bank and its local business network.
By rewarding customers for their commitment and loyalty, banks can successfully lead them to interact with a variety of financial products beyond a credit or debit card.
How should a small bank brand its rewards program?
L.C.: Smaller banks should consider partnering with local businesses through “earn and burn” opportunities within their rewards program. These partnerships create a clear point of differentiation and a level of commitment in support while also helping to increase the bank’s customer base. This is the beauty of partnering with fintechs — the right partner can give a bank the option to be very specific regarding the partners or affiliates that are involved in the loyalty program. It’s important, however, that the bank owns the overall brand of the rewards program for ultimate flexibility.
From a broader branding perspective, word-of-mouth is a good branding option for community banks and is encouraged by incentivizing customers to sign up friends and family. Although this strategy may be a slower build, a referral program creates greater emotional connections.
Community banks can help increase awareness of the local business through advertising and promotion directly with customers. There is also the potential for lower bank fees, cash back or lower interest rates with the bank if the business participates in the loyalty program or helps to create offers. Some banks also offer free consultative services.