The UX of Digital Loyalty in Banking Apps

digital loyalty UX Carmen muntean

Carmen Muntean,

Head of Customer Experience

In the space of a mere decade, our digital lives have been transformed in ways we would never have imagined. Smartphones are now a ubiquitous accessory for every-day life, and there’s a converse deluge of apps targeting every aspect of a user’s daily activities.

This has resulted in heightened user sophistication and discernment, as well as an enormous increase in the competition for customer attention. At the same time – thanks to the digital wellbeing paradigm – the number of users trying to limit their smartphone usage increased by almost 20% in 2018 alone, and is set to rise.

Against this background, all businesses need to become consumer-centric by default. Through the leveraging of data, consumers can be accurately targeted, and through rewards and utility, enticed and ultimately, convinced. 

With the explosion of digital activity and options increasing exponentially, time-poor consumers are opting for ‘aggregator apps’ – one-stop shops that provide maximum utility with minimum hassle. One such example is represented by banking apps expanding their functionality. Open systems such as the Open Banking Standard signal a move away from the siloed structures of the past, and place the user’s needs at  the centre of digital activity, with a strong focus on utility and functionality. Within this new interconnected system, the user experience becomes paramount. A positive user experience leads to a loyal, returning customer, whilst an adverse one can result in negative word of mouth, and can ultimately damage a brand’s reputation.

Banking in the digital age also offers a slew of options for rewards. Rewards allow banks to differentiate from their competitors, grow their customer base and increase market share. Previously the domain of spend-based credit cards, rewards were devalued, repriced and sometimes withdrawn after the introduction in 2015 of interchange caps. Subsequently banks had to find new ways to offer customer perks, resulting in either bank-centred rewards (insurance, cashback, or access to improved rates) or retailer-led rewards (card-linked offers).    

Of the two, retailer-led offers have proved successful. Currently, 76% of Britons are members of a loyalty programme, opening the possibility for them to engage with their favourite brands through their banking channels. Furthermore, customers are 49% more likely to participate in schemes which are card-less. Those banks that are able to deliver a seamless digital experience, and integrate banking with retailer rewards, will enjoy a significant advantage in this fiercely competitive banking landscape. 

In order for this integration of digital loyalty features in banking apps to be successful, there are certain principles of user experience which, applied correctly, will help streamline information processing, goal attainment and ultimately, user satisfaction:

1.)   Informed decision making

2.)   Consistency

3.)   Hierarchy of information architecture 

4.)   Contextual approach 

5.)   Findability 

To find out more about the intricacies of implementing each of these UX principles, download the whitepaper here.