Credit unions and regional banks occupy a unique and important space in the constellation of national financial institutions. As of March 2023, there are 4,712 federally insured credit unions in the US, serving more than 136.6 million members. Regional and community banks comprise a similar footprint, with 4,001 community banks (27,511 branches) and 134 regional banks (13,109 branches) across the US as of 2022. While the largest commercial banks, with their $1 trillion-plus in assets and national reach and globally recognized credit card brands, tend to dominate the conversation about financial services in America, a significant percentage of all banking, lending, and borrowing flows through credit unions and regional banks.
These institutions are often well regarded by their customers, in large part due to the personal touch and elevated levels of service they offer. According to the Credit Union National Association, an industry trade group and advocacy organization, credit union members are 1.5 times more likely than nonmembers to say they are “very positive” their financial institution has improved their financial well-being, and 56% of members have the highest level of trust in their credit union. With this advantage in brand affinity, why do credit unions and regional banks need to invest in loyalty programs?
Why credit unions and regional banks need loyalty programs
Because it’s not all about perception and feelings of goodwill. Attracting and retaining account holders is how both credit unions and regional banks grow and maintain their customer bases and asset balances. This makes finding new ways to incentivize new sign-ups a priority, as well as exploring methods for retaining members more effectively. For credit unions, high-interest rates on savings, low rates on loans are the traditional incentives. For regional and community banks, it’s often local knowledge and expertise or sector specification (a la Silicon Valley Bank, which almost exclusively served venture capitalists and technology start-ups) that draw in and hold depositors. But these may not be enough to compete with the convenience, reach and stability that big banks can offer the general public, and that's where a travel loyalty program can be highly effective.
If a travel loyalty program is robust enough, it can not only help credit unions and regional banks retain customers and put their offering on par with the mega-banks, it can also help these institutions capture more of their members’ spending. If members are engaged with their loyalty programs and interact more frequently, the brand is more likely to be top-of-mind when booking travel or buying complementary products or services. But to do that, credit union and regional bank loyalty programs need a variety of travel and lifestyle reward options as well as comprehensive booking capabilities on par with online travel booking sites and traditional travel agencies.
What kind of loyalty platform do they need?
Despite their collective size and reach, individual credit unions or community banks often don’t have the resources to develop a comprehensive travel loyalty platform in-house. Some might rely on loyalty frameworks of the credit card networks they’re aligned with to offer benefits to their customers. Others turn to their banking software providers or transaction processors to create piecemeal solutions, like gift card incentives.
But neither of these approaches will improve the customer experience or boost retention rates the way a full-service travel loyalty platform will. They certainly won’t make credit unions or regional banks competitive with the comprehensive, feature-rich loyalty programs offered by Amex or JP Morgan Chase.
Instead, these organizations need a loyalty platform that can be deployed out of the box, that’s quickly and is configurable enough to meet the needs and expectations of customers and members (and flexible enough to adjust to shifting demands), yet is more than an off-the-shelf template that can’t deliver a branded experience. Aand perhaps most importantly, they need a solution that’s within reach. The loyalty platform providers that work with the biggest banks often just don’t have a solution designed to work within a community bank’s budget, or stipulate a transaction volume “floor” that individual credit unions could never reach with their existing membership base.
Fortunately, they’re not the only option available.
The iSeatz advantage
iSeatz offers a travel loyalty platform that’s tailor-made for credit unions and regional banks. Not only has it been proven effective in deployments with some of the country’s largest financial institutions – demonstrating that it enables banks to capture more customer spending and boost retention rates – it's also a configurable and flexible solution tool that facilitates gradual expansion.
With a microservices-based framework, iSeatz allows credit unions and regional banks to introduce the capabilities their loyalty program needs at their own pace. They can start with earning and redemption options on hotels and car rentals, then expand into flights, more advanced booking capabilities and lifestyle rewards before introducing sophisticated features like points+cash or price-freezing. In this way, the iSeatz platform can scale with a regional bank or credit union, growing the options and services available to members as their membership base grows and their expectations increase.
Perhaps most importantly, the iSeatz platform is accessible without limits; there are no restrictions to participate based on projected booking volume or cost-prohibitive upfront expenditures. This allows credit unions and regional banks to gain the benefits of a travel loyalty program without sacrificing their financial health or stretching thier memberships beyond their means.
Travel loyalty programs are not only for big banks or international credit card networks. Account holders at credit unions and regional and community banks deserve access to travel and lifestyle rewards for their loyalty, and iSeatz is making that possible.
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You can also learn more about iSeatz by reaching out to marketing@iseatz.com.