Automated Loyalty Point Loan System for Reward Redemption
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Solution Overview
Problem
Financial institutions face challenges in encouraging customer usage of financial products through loyalty programs, as customers often struggle to reach reward thresholds, leading to delayed redemption of rewards and potential abandonment of accounts due to point deficits.
Innovation Solution
Implementing a system that allows customers to borrow loyalty points when needed, based on account analysis and predefined goals, with automated point balance loan offers and reconciliation processes to manage point deficits, ensuring timely redemption of rewards and maintaining account activity.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If customers are required to accumulate sufficient loyalty points before redemption, then reward quality and program sustainability are improved, but customer access to rewards and engagement are reduced due to point deficits
Solution Approach 1:
The system performs preliminary analysis of customer accounts to identify those with point deficits before reward redemption occurs. By proactively detecting the deficit condition and automatically providing additional points, the system prevents the harmful effect of reward unavailability while maintaining the threshold requirement structure.
Solution Approach 2:
The system introduces an intermediary mechanism (automated point provision) between the customer's point deficit state and the reward redemption action. This intermediary automatically bridges the gap by supplying additional points when needed, allowing customers to access rewards without manually accumulating sufficient points beforehand.
2Quantity of substance
If loyalty point thresholds are set high to ensure meaningful rewards, then reward value is improved, but redemption frequency and customer satisfaction deteriorate due to inability to reach thresholds
Solution Approach 1:
The system implements self-service functionality where the loyalty program automatically monitors customer point balances and supplements them when deficits are detected. This automated self-service mechanism ensures thresholds are met without requiring customer intervention, maintaining both high reward values and frequent redemptions.
Solution Approach 2:
The system continuously monitors customer point balances and provides feedback by automatically adding points when thresholds are approaching or exceeded. This feedback loop ensures that high thresholds do not prevent redemption, as the system actively manages point levels to enable successful reward claims.
3Device complexity
If manual point management is used to track customer balances, then system simplicity is improved, but operational efficiency and accuracy deteriorate due to tracking errors and delays
Solution Approach 1:
The system replaces manual mechanical point tracking with an automated electronic system that continuously monitors customer accounts, calculates point deficits, and provisions additional points automatically. This substitution eliminates manual errors and delays while maintaining system manageability through automated processes.
Solution Approach 2:
The system introduces an automated intermediary layer between point earning transactions and point redemption actions. This intermediary continuously tracks balances, identifies deficits, and manages point provisioning, replacing manual tracking operations with efficient automated monitoring and management.
Data Source
AI summary
The present disclosure involves systems, software, and computer implemented methods for automatically providing a lending offer for loyalty points based on a customer account analysis. One example method includes initiating an offer analysis for a customer account associated with a particular customer and storing an account balance and a point deficit balance. The offer analysis determines whether to provide an offer for a point loan, and is based on profile information of the customer, a current point balance, and a reward identified from the loyalty account. If an offer is to be provided, an offer for a loan of points equal to the difference between the current point balance of a loyalty account and the point value cost of the reward is transmitted to a client device of the customer. If accepted, the current point balance and the point deficit are both incremented by the amount of the offer.