How BofA’s Rewards Bet Is Changing the Loyalty Equation
By Jim Marous, Co-Publisher of The Financial Brand, CEO of the Digital Banking Report, and host of the Banking Transformed podcast
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When Bank of America removed the $20,000 balance requirement for its checking rewards program, 30 million checking customers became eligible overnight.
More than 5 million have enrolled, and roughly 20,000 new-to-bank customers are now opening a checking account and joining BofA Rewards each week — 2.5 times the rate before the program launched.
Key insight: Shikha Narula, Head of Consumer Deposits and Rewards at Bank of America, said in a recent episode of the Banking Transformed podcast that the results reflect a deliberate shift toward everyday value, simpler access, and stronger connections between rewards and the broader banking relationship.
Narula’s experience offers a practical blueprint for making a major transformation work: equip employees early, connect the underlying infrastructure, and measure whether customer behavior actually changes.
Need to Know:
- Make everyday value meaningful. BofA Rewards gives checking customers tangible benefits from day one, while higher tiers add increasingly valuable benefits as customers deepen their relationships.
- Treat digital as fulfillment, not the entire journey. Eighty percent of enrollments happen digitally, but Narula says financial center associates are often the catalyst for the decision.
- Give employees a story they can tell. Frontline conversations help turn a complex transformation into something customers can understand and act on.
- Build for the whole enterprise. A program spanning deposits, lending, and investments requires coordinated infrastructure so the customer experiences one cohesive relationship.
- Measure behavior, not just enrollment. Bank of America looks at direct deposits, transaction activity, card usage, and additional products to determine whether rewards are contributing to relationship primacy.
Make Rewards Relevant to Everyday Banking
Bank of America did not start its rewards strategy from scratch. Its Preferred Rewards program had already spent a decade helping drive deeper relationships with customers. The challenge was making that value more relevant to the way people bank, spend, and pay today.
That evolution starts with a basic change in customer expectations. “Clients expect more from their financial services provider,” Narula said. Traditional banking rewards still matter, but customers increasingly want experiences and benefits that connect with more aspects of their lives.
That thinking shaped BofA Rewards. Instead of treating rewards as something reserved for customers who meet a particular financial threshold, the bank created an accessible member tier designed to provide value immediately. Checking customers can receive merchant deals and discounts across more than 15,000 brands, including everyday brands such as Shell and CVS.
Checking remained the anchor because it is still where much of a customer’s daily financial life takes place: receiving a paycheck, paying bills, and making everyday purchases. But the strategic purpose was broader.
Key insight: By making rewards accessible from the beginning of the relationship, Bank of America could give customers an immediate reason to engage while creating a path toward additional value as the relationship developed.
The strategy was to make the entry-level experience meaningful on its own rather than simply using it as a preview of what customers could receive at higher tiers.
At the same time, Bank of America preserved differentiation for customers who have deeper relationships with the institution. Benefits such as card bonuses, auto loan and mortgage discounts, subscription credits, and lifestyle benefits increase as customers move through the tiers.
The bank also changed who could access some of those higher-value experiences. Lifestyle benefits that had previously required at least $1 million in deposit and investment assets were expanded to customers with $100,000 or more.
Those benefits include curated offers and experiences, travel planning, cruise bookings, early access to tickets for major concerts and sporting events, and luxury automotive discounts.
The approach creates a progression that Narula believes is important: customers can experience value immediately, while the relationship can become more valuable as their financial connection to the bank grows.
Key Insight: Instead of asking what customers must do to qualify for a rewards program, consider what value the program can provide at each stage of the relationship — and what additional value gives customers a reason to deepen it.
Let Channels Play Different Roles
The enrollment experience is deliberately simple. Existing checking customers can join BofA Rewards in two taps through the mobile app.
But Narula’s description of the customer journey illustrates why channel metrics can tell an incomplete story.
“Digital is our primary fulfillment channel,” she said, “but our associates within financial centers are the true catalyst.”
A customer may have a conversation with an associate about broader financial goals, receive tailored recommendations, and then complete enrollment from the mobile app later that evening.
As banks continue to debate the role of branches and digital channels, this shows that financial institutions can use each channel for a different part of the customer journey. The mobile experience handles the transaction efficiently. The financial center can provide context, explanation, and a broader conversation about the customer’s financial needs.
Bank of America also redesigned the rewards experience inside its mobile app. Customers can see their benefits, activate them, view their current tier, and track their progression in one place.
That combination gives employees something tangible to discuss while making it easy for customers to act when they are ready.
It also gives the bank more opportunities to connect a seemingly simple rewards conversation with broader financial behavior. A customer who is considering where to keep a direct deposit, which card to use most often, or whether to move additional assets can now have a concrete reason to consider the value of doing more with the institution.
Key Insight: Stop treating the channel where an action is completed as the entire customer journey. Map where customers discover value, where they seek reassurance, where decisions are influenced, and where transactions ultimately happen. Those may be four different moments.
Track Behavior Beyond Enrollment
BofA Rewards also gives Bank of America another way to observe whether customer relationships are actually changing.
For the deals component, Narula said engagement requires more than opening the app or browsing available offers. Customers need to activate a deal and receive cash back from a purchase.
That distinction matters because activity is not necessarily engagement. The bank wants to know whether rewards are becoming part of customers’ everyday financial behavior.
Key insights: The early activity reflects that pattern. Forty-five percent of redemptions are occurring in retail, 20% in gas, and 18% in entertainment. Customers are using rewards for routine purchases rather than reserving them exclusively for occasional or aspirational spending.
Bank of America also looks beyond rewards activity when evaluating relationship primacy. Narula identified several signals: customers moving direct deposits to the bank, increasing debit or credit card transactions, or moving a primary or top-of-wallet credit card from another institution.
Those behaviors provide a more meaningful view of whether rewards are influencing the broader relationship.
Historically, Narula said, rewards members have shown 94% primacy and 99% retention. Thirty percent of clients obtain another Bank of America product or service within 30 days of becoming a member. Members also have three times higher card spend and three times higher investment balances.
The important point for other banks is not to replicate those metrics mechanically. It is to establish a clear connection between the behavior a loyalty strategy is intended to influence and the measures used to evaluate it.
If the objective is deeper relationships, enrollment alone is a weak endpoint. Deposit behavior, payments, card usage, product adoption, and investment balances can provide a much clearer picture of whether the strategy is changing the relationship.
Make Transformation Real for Employees
For Narula, one of the most important parts of launching a major transformation happens away from the technology itself.
She has spent significant time listening to financial center associates and the conversations they are having with customers. Those conversations provide a direct view into what customers understand, what resonates, and where employees can help make the program relevant.
Her advice to other executives is to start those conversations early.
“Invest in having those conversations with associates early enough,” Narula said. “Make sure you’re investing and educating them along the way.”
That preparation matters because employees ultimately have to translate the strategy into a customer experience. A program can be thoughtfully designed at the executive level, but its value becomes real when an employee can explain it clearly, answer questions, and connect it to a customer’s financial goals.
The other challenge is less visible to customers but just as consequential: infrastructure.
Narula said organizations can underestimate the amount of work required to bring a program of this scale to life. BofA Rewards touches banking, lending, and investments, requiring product enhancements across multiple platforms.
“All of it needs to come together seamlessly and be a very cohesive experience to clients,” she said.
That is the organizational challenge behind many customer-facing transformations. Customers experience one relationship with the bank, while the bank may have dozens of products, platforms, and teams operating underneath it.
The work, therefore, is not finished when the new experience launches. Bank leaders need to keep listening to employees and customers, identify where the experience creates friction, and continue improving the connections between the systems and teams behind it.
For BofA Rewards, that work is already continuing. Bank of America recently expanded its travel experience so customers can combine debit and credit card payments with rewards when booking travel, with access to more than 170 airline partners and approximately half a million properties.
Bottom line: A loyalty strategy gains value when it becomes part of how customers bank every day, how employees talk about the relationship, and how the institution connects its products and capabilities behind the scenes.
