BankCo . Loyalty Scheme Redesign

1. BankCo. Loyalty Scheme Redesign The Proposed changes to the loyalty scheme will generate significant profit uplift… but will net have the desired impact if the changes are incremental. Will generate profit uplift Incremental changes won’t work Can change customer behavior Cost reductions can be made Declining market position Poor customer rel’nship and targeting Rewards do not solicit required behaviors Can Improve customer behaviors Can increase contribution from best customers Can manage out poor customers Can convert more prospects Can create new revenue streams Can reduce costs for sourcing of goods Can reallocate balance sheet costs beneficially Can save mis-targeted marketing spend • Can identity profitable customers • Can retain them longer. • Can increase x-sales • Can reduce LLP • Can identity borrowers’ and make them borrow more • Can identity poor customers • Can price them out profitably • Can manage attrition • Can identity good prospects • Can design attractive CVPs • Can win converts from competition • Can increase share of wallet • Can increase x-sales • Can partner profitably • Sourcing costs are higher than industry • Can offer high value goods selectively • Swap high for low value rewards • Can legally change provision position • Others have lower provisions • Posted materials can be reduced • Process inefficiencies can be reduced