Financial Institutions

How Cardlytics Drives Engagement for Neobanks

Farrell Hudzik
6 minute read

Download the Cardlytics case study and learn how to drive engagement and spend for neobanks.


Whether it’s saving the environment, women-focused investing, or supporting local businesses, neobanks offer something for everyone.

With hyper-focused audiences, neobanks (aka “challenger banks”) fill the dovetailing trends of lifestyle marketing and accelerated consumer adoption of online banking. One nationwide survey found that 80% of consumers nationwide now prefer online services over a visit to a physical bank location, and this preference is driving consumers towards these fintech firms.

Growth, Challenges, and Solutions

According to a PwC report, the global neobank market is expected to hit $394.6 billion by 2026, up from $18.6 billion in 2019. Despite the growth, they also face challenges similar to traditional banks like churn and digital engagement and unique hurdles such as fewer products and lack of in-person services. 

By offering a card-linked cash back program, neobanks gain a partner that can address these challenges while providing innovative solutions to attract and retain customers with frictionless purchases from beloved brands.

How Do Cash Back Rewards Drive Engagement?

Cash back rewards programs engage with neobanks’ most enthusiastic customers: millennials and Gen Zers. A Cardlytics survey showed that these cohorts gravitate towards a more modern shopping experience with hassle-free rewards. Add to that the lifestyle or mission-focused component of many neobanks, and it becomes a winning combination. Niche customers such as millennials, micro, small and medium enterprises (MSMEs), and those having sporadic incomes and earnings embrace innovative technologies, especially cash back rewards that put money back into their wallets to use as they choose.

Neobanks are digital only, which adds to their appeal but also removes in-person opportunities to create stronger relationships with customers. To help minimize customer churn, they can offer products that promote customer loyalty while encouraging in-person purchases. Card-linked cash back rewards programs allow neobanks to create collections of retail brands that their customers love. About 75% of consumers say they favor companies that offer rewards. Despite being online, providing customers with an in-store experience through retailers is essential to long-term success. 

Cardlytics Can Help Neobanks Better Serve Their Customers

Cardlytics’ SDK platform is highly customizable and uses behavioral analytics to drive personalized offers and to increase purchases. Financial institution partners see a 5.6x increase of average transactions per month from previously lapsed cardholders and a 200% increase in spend and transaction frequency from cardholders who previously transacted less than once a week. When multiplied by the number of neobank customers, a cash back rewards program can also become an additional driver of revenue.

The uptick in adoption of online banking has added urgency for neobanks to differentiate in the marketplace. Cash back programs are a streamlined, rewarding way for them to connect to customers while generating revenue. And with a leading digital marketing partner like Cardlytics, neobanks can quickly put money back into their customers’ pockets while strengthening their customer relationships.

Financial Institutions
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