According to a recent report, 58 percent1 of banking customers bought a new product or service from a provider other than their primary bank in the last year. This shows the serious risk of customer attrition facing most financial institutions today. But more importantly, it demonstrates that customers are willing to shift loyalties if they get better offers from other organizations. Research shows that 73 percent2 of credit customers are motivated by exclusive access to special offers. What kind of offers work with modern banking customers and what do banks have to do to revamp their offer management capabilities? Let’s find out.
Why Traditional Offer Models No Longer Work
For decades, banks have relied on static offers. For example, they offered three free metro transactions a month, fixed maintenance fees, or standard loyalty programs. These were simple to devise and manage but they lacked both flexibility and contextual relevance. They made these offers available to customers based on broad segmentation strategies like age, gender, location, basic deposit value or number of transactions done. They completely ignored more nuanced aspects of customer relationships such as behavior patterns, life stage, needs, and preferences. This naturally resulted in poor personalization, low engagement, and missed revenue opportunities.
These static banking offers are no longer adequate in an environment where customers expect real-time, contextual engagement, and competitors (including fintechs) deliver personalized benefits instantly. Relationships must be strengthened through relevant and timely value propositions. Banks need to transition to dynamic offer management approaches that can map benefits, pricing, and incentives to actual customer behavior and market conditions in real time.
From Static to Dynamic: What Offer Management Transformation Looks Like in Practice
How does the shift from static to dynamic offer management look like in real life? Let’s consider it from the perspective of offer design and journey evolution.
- Offer Set Up
- Static: All customers get the same bundle offers, like 10 free transactions.
- Dynamic: Banks analyze customer actions and create contextual offers based on that. For example, a bank can offer improved fixed deposit rates for customers that demonstrate good savings habits. Or customers who frequently use digital channels might get extra free transfers online, while high ATM users receive different cash withdrawal fees.
- Customizable Bundling
- Static – All customers in a certain region, or of a certain value get fixed product packages. This is easy to manage operationally, and easy to roll out. But it lacks personalization and doesn’t adapt to evolving needs
- Dynamic – Bundled packages are built via digital, API-driven systems. This ensures unlimited flexibility, cross-sell at key moments. For example, Garanti BBVA3 offers customizable banking with Build-your-own app marketplace that allows users to shape their own experience.
- Dynamic Rate Management
- Static – Segment-wide static interest/margins that ensure scale efficiency but ignore individual risk/value.
- Dynamic – Real-time price changes based on behavior/market that ensures fairness, responsive risk management, margin control. For example, banks can leverage AI to analyze customer behavior and then use those insights to come up with personalized pricing offers.
- Embedded Remittance
- Static – Offer flat rewards for remittances. These are easy to communicate but don’t take into account high-value activity.
- Dynamic – Include adaptive cashback, event-based bonus. These incentivize volume and reward best customers. Some banks like SEPA / Zella4 are offering increased cashback offers for customers making frequent large transfers.
- Transaction Allowance
- Static – Monthly cap that is static for all. Ensures predictability for cost control but does not reward best customers.
- Dynamic – Analyzes history, loyalty, value to offer dynamic limits. This ensures customer satisfaction, profitable and long-term relationships. For example, banks can offer unlimited transfers for digital-first users, and tiered ones for others.
- Savings Goals/Planning
- Static – Standard plans for all that are easy to automate but not goal-centric and don’t meaningfully engage with customers.
- Dynamic – Personalized financial journeys/goal setting that ensure higher goal achievement and stickier user relationship.
- Embedded Finance
- Static – offers are made available only on native bank channels. This ensures proprietary control but has limited reach.
- Dynamic – Embed offers in third-party platforms. This expands market and reaches customers on their journeys. A good example is that of ecommerce sites like Amazon5 that provide loans at point of sale via embedded banking.
Bridging Legacy Systems and Next-Gen Agility
Dynamic offer management requires banks to blend AI-driven insights, flexible orchestration, and compliance-ready governance. Banks don’t even need to replace their legacy core banking systems to modernize offer management. A robust, microservices-based, cloud-native offer management system like SunTec Xelerate can be deployed as middleware to sit over the core infrastructure and power seamless, innovative, and impactful offer management. It can help banks to orchestrate offers for retail, corporate, and wealth products on a single platform.
Dynamic offers deliver relevance and transparency, shifting the focus from one-size-fits-all benefits to relationship-driven engagement. Customers feel recognized and valued, while banks strengthen stickiness and trust. This is critically important in a market characterized by disruption, evolving customer demands, and increasing competition. A modernized, value-driven, and dynamic offer management process can be a powerful driver of long-term growth.
