banks
bank

by Bedah Mengo

“I had been awarded several points in the last six months that the scheme has been running and I decided to redeem them. I did not have a microwave, which is why I went for it,” he recounted on Wednesday.

banks
bank

Every time the software developer has been transacting with the bank, for instance, by depositing money or withdrawing, he has been earning points depending on the value of the transaction.

The bonus points can be redeemed for various goods and services that include travel, taxi services, clothes and electronics.

The loyalty reward schemes, initially a preserve of supermarkets and the mobile phone service providers in Kenya, have now hit the East African nation’s banking sector as competition stiffens.

The number of commercial banks in the country embracing the schemes is fast-rising, with customers being rewarded, including for opening accounts.

Initially, the financial institutions had restricted the bonus schemes to the use of debit or credit cards in bid to encourage the utilization of plastic money, whose uptake has been low due to widespread use of mobile money.

Kenya Commercial Bank and I&M Bank are leading in the use of loyalty schemes to lure customers to their side.
“Every time you transact with your credit, debit or pre-paid card, use KCB mobile, bank online, deposit money at any KCB Mtaani agent, process your salary, or even take a loan, mortgage or insurance cover, KCB rewards you,” says the bank.

Customers can spend the Simba Points on various kinds of goods and services that include travel, hotel accommodation, car hire, shopping clothes, electronics and appliances, among other items.

Similarly, I&M Bank rewards customers anytime they transact on the internet and mobile phone, take loans, process salary and withdraw cash from teller machines.

“We reward you with points equivalent to 2 percent of transaction charges on all eligible transaction types. Points are accumulated daily and credited to your active transactional account on a quarterly basis,” says the bank.

Bank customers in the East African nation laud the loyalty schemes, noting that they will make them stick with the financial institutions.

“The only reason I have been shopping at one supermarket is because I earn points that I normally redeem for school fees at the beginning of the year. I have been loyal for the past five years, now if this has reached the banking sector, then I have reason to be loyal to my bank,” said Vincent Odhiambo, a pharmacist.

The East African nation’s banking sector consists of 43 financial institutions, with about 20 million people of the 44 million population having access to their services, according to the Central Bank.

The banks have been innovative as they fight for customers and seek to raise deposits. Recent innovations in the lucrative sector include offering services through agents and mobile phones.

The banks’ profits in the first half of this year grew 8.3 percent, with the 43 institutions posting a total of over 75 million dollars in pre-tax profit.

“The loyalty reward schemes have made supermarkets and mobile phone service providers in Kenya stand out because they make customers feel appreciated and part and parcel of the institutions. Certain people feel good when they are rewarded for using their money. For banks, it is a good move but they are seemingly turning to them late,” said Ernest Manuyo, a business management lecturer in Nairobi. Enditem

Source: Xinhua

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