Location Based Offers: The next frontier for consumer banks

Vandan Jain
3 min readOct 29, 2017


Image credits: Plastiq

The proliferation of mobile devices coupled with increased advancements in technologies has brought with it a host of new challenges for the banks.

They are grappling with more competition from other banking and non-banking institutions, low profitability due to increased commoditization and decreased customer loyalty.

According to a recent EY survey, approximately 50% of the bank customers either opened or closed accounts and services over a 12 month period

To counter these challenges, banks need to employ: First, strategic partnerships with retailers and second, technologies that are able to harness the digital data that surrounds customers.

This can then be used to provide Location Based Offers (LBOs) from retailers to customers thereby increasing the relevancy of the offers.

Here are the main reasons consumer banks should care about LBOs:

Increased customer loyalty

As customers continue to show an increased use of smartphones and other technologies, their behaviours and expectations are shifting in massive ways.

They are willing to share their personal data with the banks but there is a clear trade-off: they expect personalization of services in terms of advice, interest rates, and offers

According to a research by Accenture, 67% of the customers will grant access to more personal data, but 63% want more tailored advice.

Hence, banks must capitalize on this unique opportunity to provide compelling offers that are contextually relevant to the customers.

Consider this instance: You are out shopping in the nearby market and your buying patterns show that you have used your credit card multiple times for purchasing a cup of coffee.

This behavioural and location-based data can be used by banks to provide you an offer on your nearby coffee shop at the time of your shopping.

As a consumer, your engagement on such offers would be way better than that on airline and ticket offers that you receive regularly from banks.

This is the power of location based offers

According to a research conducted by Pew Research Center, approximately 46% customers reacted positively to location based offers

Mobile technologies combined with real-time behavioural analytics can help banks identify the “best moments of opportunity”.

This would enable them to differentiate themselves among a sea of commoditized banking products thereby increasing the loyalty of their customers.

Improved relationships with the retailers

In recent years, the relationship between banks and retailers has been strained by a high degree of self-interest and loss of focus on their mutual customers.

However, due to technological advancements, competitive shifts, and changing customer behaviour, retailers face a host of issues too.

They, too, are plagued with decreased customer loyalty due to rapid shift to e-commerce stores for retail purchases

This is where banks and retailers need to evolve and strengthen their relationship. They need to change the conversation and focus on how each can add value to the relationship.

Retailers can use detailed insights from banks about a person’s demographics and psychographics to create highly customized offers to attract the right customer to their stores at the right time.

This would lead to increased engagement from the customers thereby not only increasing the customer loyalty but also improving the revenue for both retailers as well as banks.

According to a study by MIT Sloan, consumers spend 100% more when they’re purchasing with cards instead of cash

Hence, moving from a confrontational to a collaborative relationship will create a mutually beneficial situation for both the parties.


The proliferation of mobile devices and the rapid advancements in technologies has not only brought challenges but also unlocked new opportunities for banks — enabling them to provide contextually relevant location based offers from retailers.

This is especially empowering for banks that are looking forward to creating differentiated and personalized experiences for their customers.

Result of grabbing this opportunity → Increased customer loyalty thereby leading to better retention and accelerated card usage and improved relationships with retailers by creating a win-win situation for both of them.

Hope you liked my thoughts on “Location Based Offers: The next frontier for consumer banks”.

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Vandan Jain

Co-founder at HSV Digital