Banks are rethinking how they create lasting engagement through personalisation, seamless digital experiences and everyday value. Shikha Narula, Head of Consumer Deposit Products and Rewards at Bank of America, shares why relationship banking is taking on renewed importance in a crowded market.
With digital banking now firmly established and customers holding relationships with multiple financial institutions, retail banking has entered a new phase of competition where loyalty is no longer defined by rewards alone.
Retail banking has reached an inflection point. Over the past decade, banks invested heavily in digital transformation, making mobile banking, instant payments, and digital onboarding mainstream. Those capabilities, once considered competitive advantages, have become baseline expectations.
Customers have become more willing to spread their financial lives across multiple providers, using one institution for deposits, another for credit cards and others for investments or payments. The challenge for banks is no longer simply attracting customers, but on how to retain as the primary financial partner.
Rather than functioning solely as marketing tools or credit card incentives, loyalty programmes are being used to strengthen customer relationships, encourage deeper engagement across products and create more meaningful interactions beyond individual transactions.
For Shikha Narula, Head of Consumer Deposit Products and Rewards at Bank of America, the shift begins with changing customer expectations. “Client expectations are changing,” she says. “People want everyday value and experiences that feel tailored to them.”
From transactions to relationships
Customers today expect more than competitive rates or efficient service. Their expectations are shaped by digital experiences outside banking, where retailers, streaming platforms and technology companies use data to deliver personalised recommendations, relevant offers and seamless user experiences. Financial institutions are responding by looking beyond product-led strategies towards relationship banking, recognising customers across their broader financial journey.
That philosophy underpins Bank of America’s approach to BofA Rewards. “With BofA Rewards, we’re recognising a client for their entire relationship with the bank, so we can make banking and investing feel more connected and relevant to how people live, spend and plan,” Narula explains.
For her, loyalty programmes are evolving beyond rewarding spending behaviour. “Rewards are moving from one-off transactions to an important way banks can build deeper relationships across a client’s financial life”, Narula explains.
This reflects broader industry dynamics where rising customer acquisition costs, sustained competition from digital banks and fintechs, and increasing pressure on deposit growth have prompted many financial institutions to place greater emphasis on customer retention.
Loyalty initiatives are becoming an important mechanism for encouraging customers to consolidate more of their financial activities within a single institution, increasing both engagement and lifetime value.
Making those programmes accessible, however, is equally important. “The biggest priority was removing barriers to entry and making the programme easy for everyone to use and join,” Narula says.
For Bank of America, that meant broadening eligibility while simplifying the overall digital experience, allowing customers to enroll and manage their benefits through a unified platform.
Beyond digital convenience
Digital banking itself is also entering a new phase. The conversation has changed from whether customers will embrace digital channels to how intelligently banks can use those channels to anticipate customer needs.
Artificial intelligence (AI), predictive analytics and behavioural data are enabling financial institutions to move beyond broad customer segmentation towards more contextual, real-time engagement.
Bank of America has witnessed that evolution first-hand. Its clients digitally connected with their finances a record 30 billion times last year, illustrating how digital interactions have become embedded in everyday financial management.
Yet Narula believes functionality alone is no longer enough. “Clients today expect more than just responsive service,” she says. “They want their bank to anticipate their needs and deliver relevant, personalised insights and offers.”
While AI is expanding banks’ ability to understand customer behaviour, she shares the perspective of many industry leaders that technology should enhance, not replace, the human understanding of customers’ financial goals. As she notes, “Clients expect their financial experience to reflect their needs, habits and ambitions.”
That expectation extends beyond financial products themselves. Across the industry, banks are increasingly incorporating travel, dining, retail and wellness benefits into their propositions as they seek to become part of customers’ everyday lives rather than remaining occasional financial service providers.
“We’re seeing a clear shift away from purely product-led banking to something much more experience-driven,” Narula says. “Clients expect their bank to deliver value not just through financial products, but through benefits that connect to their everyday lives.”
For Narula, the objective is not personalisation for its own sake but delivering benefits that evolve alongside customers’ changing priorities.
“Our goal is to deliver personalised value that feels relevant at every life stage. As their financial life changes and grows, the benefits grow alongside them.” – Shikha Narula, Bank of America
Leading innovation through customer insight
Leading innovation through customer inthat vision requires more than technology. Within large financial institutions, innovation often depends on bringing together expertise across multiple business lines while maintaining a clear understanding of changing customer behaviour.
“For me, innovation starts with understanding the client,” Narula says. She points to collaboration across product, technology, marketing, consumer banking, Merrill and the Bank of America Private Bank as an important factor in developing the bank’s rewards strategy. Creating an environment where teams can test ideas, learn from customer feedback and adapt quickly, she says, is essential to maintaining relevance in an increasingly competitive market.
Narula expects loyalty programmes to continue evolving from standalone benefits into broader relationship ecosystems that integrate banking, investing and lifestyle experiences.
“The biggest opportunity will be moving beyond transactional rewards and toward full relationship-focused ecosystems,” she says. “Ultimately, it’s about deepening relationships and delivering meaningful everyday value to millions of clients.”
As digital capabilities become commoditised and customers continue to demand more personalised experiences, banks are shifting their focus from product ownership to relationship depth. Success will depend less on offering the widest range of financial products than on understanding customers well enough to remain relevant throughout every stage of their financial lives.
For Narula, loyalty is ultimately about trust. Rewards may encourage engagement, but enduring relationships are built when customers feel understood, recognised and supported as their needs evolve.
