Bank of America will start sending out alerts to its customers (starting next week) regarding new adjustments to its rewards program, and the existing members will be automatically enrolled to one of the levels. Customers who are new will be allowed to opt in. The relocation is an indicator of a significant change in the way the bank targets the loyalty of customers.
In the past the rewards system of the bank had a minimum of 20,000 as a balance requirement. With the redesigned structure, the program will increase access to almost 30 million of the already available customers. According to the executives, the wider eligibility matches the evolving customer expectations.
Head of consumer and small-business products and analytics Mary Hines Droesch called the overhaul a step into a new stage of loyalty of the bank. According to her, the redesign is based on the success of the previous one but the program is made more contemporary to meet the needs of the clients. It is aimed at increased interaction in the banking products.
The new program has four levels, which are member (less than 30,000), preferred plus (30,000-less than 100,000), preferred honors (100,000-less than 1 million), and premier (1 million and above). The benefits of the tiers increase in level.
New Tier Structure Expands Customer Access
 Bonuses in credit card rewards will be maintained, but they might be varied to existing members. The effectiveness of any change in the benefits will not be less than six months after the May rollout. In the transition period, executives focused on continuity.
The credit card reward boosts will be between 10-75 per cent based on the level of the tier. The upper levels are aimed at motivating customers to put more of their financial transactions with the bank. This framework empowers the long-term relationships with clients.
The program will also have home and auto lending discounts and certain fee waivers besides credit cards. The bank also includes identity and fraud protection services free of charge in response to the needs of customers to have more security features.
Lifestyle Benefits and Lending Perks Added
 It is worth noting that lifestyle assistance will now commence at the lowest level in the balance of $100,000 as compared to the former requirement which was at the balance of $1 million. The top level will however remain highly personalized and exclusive. The differentiation is meant to keep aspirational.
The bank will differentiate offers according to the geographic position of the customers and their previous use of rewards. One of the aspects that are likely to contribute greatly to increasing engagement is personalization. Analytics-based information will assist in the enhancement of customer experience.
Redesign of the digital experience is also being implemented in the mobile application and online banking of the bank. The aim of the improvements is to make it easier to navigate the site, and rewards are easier to follow and redeem.The overhaul is focused on technology investment.
The AI-driven virtual assistant, Erica, will also take customers through the specifics of the program and assist them in accessing more value. Later on, the assistant can be proactive in proposing measures that customers can undertake to earn more rewards.
Digital Enhancements and Growth Strategy
 The rewards reinvention is in line with wider expansion objectives at the investor day in November of the company. The medium term objective of the bank is to achieve $20 billion in profit per year. It is also targeting to expand its consumer clients to 75 million in five years as against 69 million.
A lot of investment has been made on the credit card business, such as digital generalization, updated card products and increased co-branding. All this is aimed at enhancing competitiveness in a saturated market.
According to executives, the plan focuses on making the company the main financial institution to the customer. The bank aims at enhancing relationships by combining deposits, credit cards, lending, and lifestyle benefits into a single ecosystem.
