Most Banks Reward Products, Not Relationships. It’s Costing Them
By Liz Froment, Contributor at The Financial Brand
Simple Subscribe
Subscribe Now!
Bank loyalty may look stronger on paper than it is in real life. Most customers keep checking, savings, and lending products under one roof, but Accenture’s 2025 Global Banking Consumer Study shows 73% of those customers also hold at least one product with another financial institution.
Multi-product customers generate some of the most stable, low-maintenance relationships in retail banking. However, most rewards programs treat them the same as someone with a single checking account.
Banks and credit unions may tailor their loyalty programs around individual products and campaigns, but those that factor in the full customer relationship are seeing stronger retention, wallet share, and more products per customer.
Need to Know:
- Start small or risk stalling out. Big-bang data warehouse projects consume budget and wander off course. Institutions that pick a single use case, like small-business lending, generate near-term ROI and carry learnings into every project that follows.
- Unified data makes you AI-ready by default. AI personalization models produce stronger inferences when fed multiple diverse but related datasets. Building a uniform data access layer solves today’s silo problem and tomorrow’s AI readiness gap in one move.
- A 96%-accurate engine can still go stale. One recommendation engine hit 96% accuracy, then drifted as local demographics shifted. Feedback loops built into the architecture from day one keep personalization sharp while competitors’ systems quietly degrade.
Why Bank Loyalty Got Stuck in Silos
Most banks built their first real loyalty machinery around cards. Card teams had room to fund points and perks, while deposit and lending teams focused on rate specials and fee waivers to bring new accounts in the door.
“Outside of cards, loyalty thinking never really took hold. What these teams successfully built were acquisition tools: introductory rates, fee waivers, and balance transfer offers — compelling enough to win a product but not designed to sustain a relationship,” Luca Russignan, global head of Capgemini Research Institute for Financial Services, told The Financial Brand. “The result is that loyalty sophistication became a card-team capability rather than an institutional one.”
As banks add products and grow through acquisition, this pattern turned into structure. Separate teams end up with separate systems, data, and budgets for each line of business.
“Most banks are set up in separate lanes,” says Gates Little, CEO of altLINE and The Southern Bank Company. “This is mostly due to how the systems are built. Credit card rewards might be managed by an outside vendor. Deposit bonuses are handled internally. Mortgage perks are often built into loan pricing. Bringing all of that together into one unified program takes increased time, coordination, and money.”
The missing links: At so many financial institutions, a customer with a mortgage, deposits, and an active credit card may earn the same rewards as someone who opened a checking account last month. That’s the loyalty gap most banks aren’t measuring.
Read more: BofA’s New Awards Program is a Radical Play for Primacy. But Will It Work?
What it Takes to Reward the Whole Relationship
Most banks already have the data to see across a customer’s products. The problem is that it spans different systems, is tied to different IDs, and rarely comes together quickly enough in one place to provide a consistent view of balances and the activity that may drive loyalty decisions.
“Banks need to create a ‘digital memory’ of the customer that consolidates data from every interaction and every product into a unified, real-time profile,” Mike Abbott, global banking and capital markets lead at Accenture, told The Financial Brand. “The future should look more like the past. Loyalty is not just about rewards. Customers want what they had 30 years ago with the branch manager — where they listened and remembered you and who you were — done digitally.”
That digital memory doesn’t have to be a full system replacement; it can be creating a data layer that sits on top of existing systems, giving loyalty and marketing teams a single place to access relationship data.
“The great news on this front is that we are seeing a tectonic shift in this direction,” Shawn Conahan, chief revenue officer at Wildfire Systems, a loyalty technology company, told The Financial Brand. “Bank websites and mobile apps have historically been for servicing clients, but in the past few years, we have seen them shift to a marketing channel. This new engagement model makes the bank a trusted financial copilot offering valuable advice to make smart money decisions when they shop, choose insurance products, or work on their credit score.”
Identity is everythingFor community banks and credit unions, that starts with getting the customer ID right.
“First, you need the clearest picture of who the customer is. That sounds straightforward, but it’s easy to get a single customer ID mixed up across various checking, loans, and cards,” says Little. “You also need a data layer that can pull things like balances, tenure, and transaction activity into one place and as close to real-time as possible.”
Little says that once the ID and data layers are connected, a rules engine can deliver benefits across products. For example, if a customer has a mortgage and keeps over $50,000 across accounts, they could qualify for an automatic rate discount on a future auto loan or better rewards on their debit card.
How to get started:Most institutions can start small. Linking core deposits and cards to a shared profile is enough to start boosting rewards for customers who carry both, or to waive fees once balances and tenure meet certain thresholds. That enables loyalty teams to see beyond just a single account and start rewarding the relationship.
What Changes When You Reward the Whole Relationship
Most banking customers today are what Abbott calls ‘lazy loyalists.’ They seem stable, but they’re not deeply attached. They stay because switching is inconvenient, not because they feel recognized. Accenture’s research found that 60% of consumers want relationship-based rewards, but only 45% are satisfied with what they currently receive. That leaves a wide opening for banks that can close the gap.
“Our data shows an uptick of 7% retention when you reward the customer horizontally, regardless of whether they are a debit customer, a credit customer, or if they have a car loan with the bank,” says Conahan. “That is a huge number for an industry that is increasingly fractured and where consumers have almost unlimited choice when it comes to banks and fintechs.”
Capgemini’s research shows a similar pattern on the product side. “Fifty-two percent of customers say they would buy more financial products if incentives were tied to overall engagement rather than a single product,” says Russignan.
Accenture found that customers who feel valued hold 17% more products and give 5% to 30% more share of wallet to their primary bank. One US bank with a redesigned loyalty model achieved annual retention rates approaching 99%, compared with roughly 75% across the industry, according to EY.
The key shift:“When recognition becomes continuous rather than a one-time qualification, customers behave differently. They consolidate balances, deepen product usage, and migrate financial activity toward the institution that acknowledges their total contribution rather than a single dimension of it. The relationship itself becomes the switching cost, not any individual product feature or rate,” Russignan says.
For community banks, even simple relationship-based incentives can shift the conversation. Picking a single segment, like small business customers or mass affluent households, creating a basic relationship score, and defining two or three clear benefits tied to it is a practical starting point.
Where Relationship Loyalty Goes Next
“Lazy loyalists” have given banks a false sense of security, but the numbers are clear: customers who feel recognized for their whole relationship stay longer and bring more of their wallet with them.
The financial institutions that move first to tie rewards, pricing, and experiences to the full customer story, not just a single product, can turn loyalty from a card feature into a growth engine.
