I was reading a recent Financial Brand article about how Bank of America seems determined to prove it can be reborn through rewards. I’ll give them credit; this is a bold move. I am a big fan of offering incentives particularly if focused on attracting and keeping young customers. However, I don’t believe BofA’s new program will achieve what they think it will, and more importantly, I don’t believe it addresses what actually matters. Let’s start with what BofA is trying to achieve. They are replacing its long-running Preferred Rewards program with a new structure that expands eligibility to virtually all customers, i.e.: no minimum balances required to get in the game. That’s a meaningful difference. Instead of a gated, balance-driven loyalty program, BofA is creating a broader funnel designed to: Encourage consolidation of financial relationships Increase credit card usage and balances Provide tiered incentives tied to relationship depth Blend mass-market rewards with premium perks In other words, this is a primacy play, and to be clear, I have no argument with the intent. The problem is not the strategy. The problem is what they believe drives primacy. I believe primacy isn’t built on rewards; it’s built on behavior. If you read my recent article on account primacy, you know where I stand: The checking account was never the franchise. Payments are. And I’ll take it one step further – rewards don’t drive behavior. Experience does. BofA’s program is fundamentally designed around relationship consolidation through incentives. But customers, especially younger customers, don’t consolidate because of rewards. They consolidate because of habits, and habits are formed in payment moments. Moments of truth. Not in tier structures or mortgage discounts. Not even in “lifestyle perks.” I am not sure this program will meaningfully attract or retain younger customers. Why? Because younger customers don’t think, “If I move $30,000 here, I get a rewards boost” or “If I hit six figures, I get better loan pricing.” They think like this: Can I split this payment instantly? Why is this transfer not real-time? Why is this app more cumbersome than Venmo? Why can’t I see everything in one place? The article itself hints at the fragmentation problem, customers already spread accounts across institutions, often without closing anything. Yet, that’s not the real issue. What’s consolidating is behavior, and behavior lives mostly with payments. Plus, I think BofA missed a massive opportunity. Their new model has zero gamification. This matters more than most bankers realize. I have written before about the need to rethink how we engage customers, not just inform them. Not just reward them but engage them. Gamification is not a gimmick. It is how younger customers interact with the world: Fitness apps gamify health Credit apps gamify scores Retail apps gamify spending Even investing apps gamify risk-taking (perhaps dangerous results…) Yet in banking? We still offer mobile banking apps that don’t meet their expectations… Imagine if instead of static tiers based on balances, a bank built this around behavioral engagement. Not: “Maintain $100,000 and get better rewards” but instead: “Use your debit card 15 times and earn rewards” “Set up savings automation and earn rewards” “Avoid overdrafts and earn rewards” “Use real-time payments and earn rewards” “Refer a customer and earn rewards” That makes so much more sense to me. Because now you are reinforcing: Financial wellness (paternalistically beneficial); Revenue-generating behaviors for the bank; Daily engagement with the platform; Habit formation. This is exactly the type of model I’ve been advocating, turning banking into something closer to a behavior-driven ecosystem rather than a static product set. And more importantly, customers feel like they are making progress, not just qualifying for perks. This emotional distinction matters. In fact, it matters … a lot. The fact that BofA is consolidating accounts to make new tiers is not anything new. That’s airline loyalty programs … circa 2015. Even the article itself points out the parallel, rewards increasingly tied to account balances, not your overall behavior. I believe that model has problems: It rewards wealth, not engagement It excludes younger customers early in their lifecycle It creates “goalpost movement” frustration (as seen with reward reductions) It ignores behavioral drivers of long-term value Perhaps most importantly, it does not create regular interaction. Behavior beats loyalty every time. I hear bankers frequently talk about their loyal customers. In fact, most of them are referring to “repeat” customers, not loyal customers. If your customer: Uses your app daily Executes payments through your rails Relies on your alerts and insights Trusts your system to “just work” You don’t need a rewards program to create primacy. You already have it. However, if your customer: Keeps a checking account with you Uses another app for payments Uses another platform for savings Uses another institution for credit Then no number of rewards will fix that because you don’t own behavior. The article also references the potential of deeper relationships and personalization. However, simply adding in AI is not the winning strategy. AI layered on top of a weak payment experience is just smarter, faster frustration. However, if a bank combined: Seamless payments Real-time rails (RTP, FedNow) Intelligent alerts Behavioral nudges Financial wellness insights Gamified engagement Then, an integrated AI experience becomes powerful because it’s operating inside a system where the bank already owns the moment of financial decision. Here’s the part that should matter most to you. You do not need BofA’s budget to win this game. You need: a) A clear understanding that payments are your franchise, b) commitment to making your virtual branch your primary branch, c) a willingness to rethink how you reward behavior, d) a focus on experience over product and e) the discipline to test your own virtual branch, identify friction, and fix it! As I’ve said before, you would NEVER operate a physical branch with a “what’s the cheapest option?” philosophy. So why are we still doing that with the virtual branch? The article references the idea that the real question is: for which moments will we be primary? That’s exactly right, but let’s sharpen our focus. If you win enough of these moments: the paycheck moment, the spend moment, the P2P moment, the capital needs moment or the small business cash flow moment, then you don’t need to ask about primacy. You are primary. Let’s give Bank of America due credit for trying to rethink primacy. Opening their program to all customers is smart. Expanding cross-product rewards is also smart. Yet, it’s still rooted in an old model of banking behavior, and this model is fading. So, what should you do instead? If you are a community bank executive reading this, you should: Put payments at the center of your strategy; Map your current payment experience (honestly); Identify friction points; Build a roadmap to eliminate that friction; Rethink rewards as behavior-driven, not balance-driven; Explore gamification, seriously, not as a novelty; Align AI initiatives with payment-driven engagement. Because here’s the reality: the institutions that own daily financial behavior will win. The ones that don’t? They’ll still have checking accounts. They just won’t have customers who care. If you want to talk about how to evolve your payments strategy, rethink engagement, or explore behavioral models that actually drive primacy, reach out to me at dpeterson@bankers-bank.com. Let’s make sure that as community banks, we don’t just respond to this shift. Let’s make sure we lead it. Authors Note: ChatGPT was used in researching this article Resources https://thefinancialbrand.com/news/payments-trends/bank-america-rewards-primacy-195911?categorySlug=payments-trends&postSlug=bank-america-rewards-primacy-195911&_hsenc=p2ANqtz-8tVXurVd5RcBaStQx4WeFUFTYJL37tg_0b_kK7-s8DwXCaWEi3UVRmU5wgozLkkdB77mIEyaby4xHC_y3t5-oJyWG6NA&_hsmi=410982348