How Banks Can Reclaim Their Place in Customers’ Financial Lives

Attention bankers – envision this scenario: Every month, salary direct deposits land in your portfolio of current accounts. From 30,000 feet, you are led to believe you have a reliable following of account holders. What you may not see is that something unpredictable is happening to that predictable bi-weekly deposit:

• A mortgage payment goes to a challenger bank.
• Savings are transferred to a competitor’s high-yield account.
• Payments go to a competitor’s rewards card for groceries and daily expenses.

Despite the evidence of regular deposits, the primary banking relationship is quietly dissolving. “Banks have no way of knowing what’s going on because the salary still arrives, but they never see the money spent,” says Campbell Shaw, Head of Partnerships at Valuedynamx. That invisibility is the central crisis of modern banking loyalty, and the competitive forces making it worse have never been more acute.

The Multi-Account Reality

The traditional definition of a “primary bank” has been rewritten — not by institutions, but by customers. Salary destination is now a lagging indicator of loyalty, not a leading one. Consumers today actively architect their financial lives across multiple providers, choosing where their money lives rather than simply where it lands.

“Having someone’s salary is no longer the same as having their business,” Shaw argues. “The deposit is just the first step. What happens after that is everything. Does the bank give that customer a reason to stay, to spend, to think of that account first when it matters?” For most UK banks, the honest answer is: not reliably enough.

What “Top of Mind” Actually Means

Top of mind is not a brand metric. It’s a behavioural one. It means being present before the payment moment, not scrambling to intercept it. The mobile app is the highest-frequency touchpoint a bank possesses — and most are still using it primarily as a ledger.

Shaw frames the challenge precisely: “The goal is to be there for customers every day, so they’re predisposed to know how they’ll pay, rather than waiting until they get to their wallet. If you’re checking your balance on Friday night and there’s a message about saving at a restaurant 500 yards away, it’s contextually valuable.”

That distinction — between being useful and being memorable — is where most bank loyalty programs fall short. Contextual, timely value builds the mental shortcut that makes a customer reach for one card over another. Generic cashback offers may not have enough impact to make a difference.

Why Banks Couldn’t Do This Before — and Why They Can Now

For years, product silos in retail banking made sophisticated loyalty architecture nearly impossible. Product-based organizational structures meant that the customer with a mortgage and the customer with a current account were, from a systems perspective, strangers to each other — even when they were the same person.

“Two years ago, a bank had no idea that the person with a mortgage was the same person with a current account. They were messaging them as two different customers,” Shaw notes. “That’s finally changing — but there’s still a lot of road ahead.”

CRM unification is enabling the shift from vertical, product-based program design to a horizontal, customer-centric architecture. The infrastructure is catching up, but strategic ambition must follow.

Building a Program That Works at Every Layer

Effective loyalty in banking operates across three distinct layers:

• The base is everyday merchant-funded value — accessible, broad, and relevant to the mass of customers.
• The middle layer targets life-stage segmentation: deploying the right offer at the moment a customer is most receptive — a first home, a new family, a career change.
• The top layer is premium brand partnerships that create genuine differentiation and justify the cost of engagement.

“You need to deliver value at every level — the everyday, the life-stage moment, and the premium tier. You can’t just pick one mechanic and hope it carries the whole relationship,” Shaw says. The most sophisticated programs understand that these layers are mutually reinforcing, not interchangeable.

The Premium Brand Opportunity

Look at any bank’s transaction data and the same names dominate the top of the list: Apple, Amazon, eBay and more. These brands may be naturally resistant to invest in traditional customer loyalty strategies, but what they do want is something only banks have.

“Transaction data tells you how someone actually lives their financial life. That’s something no brand, no matter how large, can replicate. It’s the bank’s greatest asset — and most of them are still underusing it,” Shaw observes.

The walled garden of the mobile app allows banks to deliver discrete, highly targeted value from premium partners without cannibalizing margins. That mutual exchange — segmented customer intelligence for exclusive brand access — is the partnership model that traditional incentive structures cannot replicate.

Where Banks Get It Wrong

A common strategic blunder is to treat loyalty as a campaign rather than a continuous discipline. Banks often launch programs, then manage them to a spreadsheet rather than to a customer relationship. The off-the-shelf trap is equally dangerous, with a procurement process substituted for strategic design.

There is also a structural paradox hiding inside most merchant-funded models. By restricting offers to specific spending categories, banks systematically exclude their most loyal customers — those who already spend with them broadly and don’t need a nudge.

“Off-the-shelf gets you started, but it has to evolve, or you end up with a program that works for some customers and quietly fails the ones who needed it most,” Shaw warns. Flexibility is not a feature request – it is the minimum requirement for relevance at scale.

The Real Battleground

The shift from top of wallet to top of mind is not a marketing initiative. It is an organizational one. It demands unified data, premium partnerships, and a sustained commitment to understanding how customers actually live their financial lives — not just where their salary arrives.

Relevance before the payment moment is the new battleground. The banks that will win are the ones building presence in the daily financial life of their customers — not waiting to intercept them at the moment of transaction – when it is probably too late to influence their purchase decisions.

“Loyalty means different things to different people. You have to be flexible in what rewards you give, when you give them, how you give them,” Shaw concludes. The salary will keep arriving. The question is whether banks will finally pay attention to what happens next.

Editor’s Note

Campbell Shaw is Head of Partnerships at Valuedynamx, a leading provider of purchase-based rewards and loyalty solutions for financial institutions. For an in depth discussion of this topic, you can enjoy this video discussion with Campbell Shaw and host Bill Hanifin.