First Horizon, FIS put faster payouts at heart of new loyalty program
First Horizon Bank has chosen to utilize FIS’ Relationship Rewards white label solution to provide faster rewards payouts that focus on the entire bank-customer relationship and not just individual transactions.
The initial focus for First Horizon is to use faster rewards to grow its deposits among its 1.5 million existing consumer accounts as well as to attract new customers.
"The speed of rewards redemption will be faster, often same-day or overnight instead of weeks when delivered by the traditional loyalty platforms," said Mladen Vladic, general manager of loyalty services at FIS. "It helps that we are processing debit transactions for First Horizon so we can see deposit flows.”
The $43.7 billion-asset First Horizon (formerly called First Tennessee Bank and Capital Bank) announced in November that it was acquiring $31.7 billion-asset Iberia Bank of Louisiana in a $3.9 billion deal, making it the second largest bank deal of 2019.
Vladic points out that there is a critical need to evolve existing bank loyalty programs based on how card-based rewards redemptions have gone and the effect of Amazon Prime. Vladic points to the work FIS does to to enable instant cash rewards redemption at the pump for customers purchasing gasoline at 7,100 BP and at 11,400 Shell stations as an example.
“We gave the ability to cardholders to instantly redeem cash rewards at the fuel pump at BP gas stations and Shell and are now working on implementing it at Citgo," Vladic said. "It’s become an expectation of instant gratification. We noticed that the industry was changing when Amazon Prime offered free two-day shipping for all purchases for $119 a year. People expect quick delivery for everything. It’s now translated to cards and banking where you can’t take more than two days to deliver a reward-based redemption.”
The loyalty program is complementary to the existing cash and point-based transactional credit card rewards programs First Horizon has in place because it takes a page from transactions rewards and layers on other features such as tenure.
The FIS loyalty program will help track the rewards earned and inform the bank on how to deliver them. For example, First Horizon will provide a partial reimbursement of wire transfer fees when a deposit is coming from another bank. Additional rewards include higher interest levels earned on deposits based on tenure of the deposit holding and size of deposits.
“It is complementing the transaction-based bank offering, not replacing it because it allows the bank to drive a stickier relationship by either growing assets or creating new product relationships," Vladic said. "The more touchpoints a bank has with a consumer, the harder it is to for them to leave the bank.”