Millennium Post

Auto redemption of loyalty points in banks

Kolkata: Banking in India has come a long way to ensure customer centricity and with the direct or digital banking transactions becoming more popular, the space for customers in the banking lobby is becoming wider everyday.

After the Consumer Protection Act 1986 changed the world of Indian customers, the introduction of the Banking Ombudsman Scheme has lived to be the most trusted and empowered complaint redressal mechanism in our country. But the customer deserves a lot more even without complaining and BCSBI has revolutionised the management of customer expectation. BCSBI is taking utmost care to address even minor inconveniences of the customers and seamlessly managing transparency through implementation of fair practice codes of banking.

The wish list is always longer and we can hope to see more of such fair practice codes from BCSBI in the coming days. I would personally like to recommend auto redemption of loyalty points across all banks in India. As of now, ATM cards or Debit cards are the most popular form of digital banking transactions . Every bank offers loyalty points on shopping by using debit cards but a large segment of customers do not avail themselves of the same. The present system of loyalty points redemption is cumbersome and involves submission of claims by the customer. Many are not even aware of the benefit available. As a result, à large amount of loyalty points remain unredeemed . This is a denial of due to the customer if we take a closer look at it.

Now the issue is , why a benefit which is admissible and is directly linked to banking transactions, should be denied if it is not claimed for. If payment of interest in deposit accounts can happen without claiming, why the redemption of loyalty points cannot happen the same way.

Non banking digital shopping platforms by e-retailers manage the matters of offers and discounts in a skilled way as this is their core focus area and they still work on a much smaller customer base. Even the credit card holders are a much smaller community of customers, who are generally smart users of digital platforms and can navigate the redemption of loyalty points and reinvestment offers with ease.

But the banks work on a huge customer base and crores of individual customers or savings bank account holders have their first orientation to digital banking through the Debit Cards issued by the banks. Many do not need credit, many still treat credit cards as debt traps and there are many many more who are not eligible for a credit card.

Though debit cards are mostly used for the purpose of cash withdrawal , shopping by using debit cards happens to be one of the most pleasant experiences for the customers. An auto sharing of eligible benefits will revolutionise use of debit cards for shopping and will be perfectly in line with the government mission of popularising digital banking. Small time ' limited period cashback offers ' for purchase through debit cards, particularly during festivals or other co-branding offers for debit cards are already in place.

Auto redemption of loyalty points will encourage more purchase, boost economy and digital banking transactions. There is nothing sweeter than some unanticipated credit in your account , a cashback by your own bank.

The banks can definitely encourage more digital transactions this way and benefit from much more flow of low cost funds in the savings bank accounts and the current accounts of customers.

This will also effect sizable reduction in physical as well as paper transactions in banking.This will be another best practice for motivating digital banking habits.

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