To that end, a combination of new technology and the new world of financial reform may bring something many consumers have sought: personalized debit card rewards for their expenditures.
"Companies are going away from the one-size-fits-all model of rewarding customers to a targeted approach that will mean you will get a different offer from your neighbor depending on your transaction history," says Alan Goldstein, managing director of ALG Partnership Marketing in Marietta, Ga. "For instance, while I might get a discount coupon for Victoria's Secret around Valentine's Day, my wife would get them all the time since she is more likely to shop there regularly."
Chuck Christianson, group vice president of sales and strategy for Affinion Loyalty Group in Richmond, Va., says his company has designed an "engagement platform" to build customer loyalty to specific banks. Affinion is working with Bank of America to provide benefits to customers such as identity-theft insurance, product protection and luggage insurance that could be handled directly through the bank's website.
"The benefits offered are personalized with a tool that gets smarter the more a customer uses it," Christianson says. "The tool knows what customers click on and how long they look at an offer." The tool allows benefits and debit card rewards programs to concentrate on individual consumers based on a combination of demographics, Web searches and spending patterns of the customers.
Christianson says personalization is happening now in small pockets, but he expects the trend to expand as financial institutions begin to use new technology.
Goldstein says any time a company can offer a personalized, relevant benefit, it can build customer loyalty.
"Some financial institutions are offering merchant-funded rewards programs so that, for example, if you use your debit card at McDonald's, you'll get a 10 percent discount immediately," Goldstein says.
Social media and rewards
Dan O'Malley, CEO of PerkStreet Financial in Wilmington, Del., says banks that know their customers' interests through transaction history and social media can help them shape their rewards programs.
"A tremendous number of our customers follow us on Facebook and Twitter and read our blog, and they give us feedback there, too. For example, at back-to-school time we asked them what stores they would like to see as part of our debit rewards program, and they requested Staples and the Apple Store," he says.
PerkStreet customers earn 2 percent cash back for the first three months of using their debit cards for non-PIN transactions and then 1 percent cash back thereafter. If their balance is more than $5,000, customers earn 2 percent cash back on an unlimited number of non-PIN purchases. In addition, the bank offers Power Perks, which allow customers to earn 5 percent cash back with rotating categories and retailers.