The advent of artificial intelligence is expected to create significant opportunities for brands to connect with consumers through AI-powered loyalty programs that become increasingly more efficient and personalized.
But Jakob Harrison, Head of GTM for Payment Networks at fintech company FIS, notes that just like all new technology, AI will also bring new challenges for brands. This is especially true as agentic commerce grows more prevalent and transforms how consumers shop.
“Brands are going to need a loyalty engagement solution that's more immediate, more relevant and easier to execute because they're going to be competing not only for the consumer but the AI agent as well,” Harrison said. “And the winning experience is the one that not only the consumer has, but that its assistant or its agent can confidently choose and apply in real time.”
Optimizing the Customer Experience
FIS builds and runs the technology infrastructure behind banks, payments, and financial institutions, powering how money moves across banking and payments. In his role, Harrison is focused on how to bring loyalty and promotions closer to the moment of purchase, looking to enable brands to influence decisions with measurable outcomes and create better consumer experiences and value where it matters the most.
According to Harrison, FIS is moving from using AI as a tool that’s analyzing and recommending based on historical data to an AI solution that can act in real time.
“What we're looking to do is bring AI into commerce experiences that can be personalized and optimized in the moment,” he explained. “Not looking at purchase-level data after the fact, but in real time when you're making those purchase decisions from an e-commerce perspective.”
This means changing how loyalty is designed and delivered not just with e-commerce, but also when consumers are looking at available promotional opportunities at the point of checkout when shopping at brick-and-mortar stores as well, Harrison notes.
Building Loyalty by Reducing Friction
Recent research by FIS and PYMNTS.com shows how important it is for brands to create a smooth shopping experience on agentic commerce platforms. According to the research, companies lose about $4.9 million annually because of payment friction, leading shoppers to abandon their cart and cancel their purchases.
“When you think about payment friction costing businesses millions of dollars, loyalty's real win is making checkout work right,” Harrison said. “That means removing some of that friction, removing some of the disconnect from your loyalty to your payments ecosystem and automatically applying eligible value.”
The research from FIS and PYMNTS also found that nine out of 10 offers today still require manual consumer effort to redeem – only about one in ten apply automatically. Also, nearly eight in 10 consumers said real-time savings would influence which payment method they default to, which speaks to how card issuers and financial institutions have a role to play in reducing that friction alongside merchants and brands.
To combat this problem, FIS last year introduced Smart Basket, an AI-powered solution that uses real-time, transaction and item-level intelligence to deliver targeted offers and value to consumers before and at the point of purchase. The company sees this as not just helping to create a more seamless buying experience for consumers that can in turn drive brand loyalty — but also gives brands better insights into shopper behavior that can help them build more targeted marketing and promotional strategies.
Brands are also able to communicate to consumers in real-time about the value they are delivering.
“Once you know that X product is being purchased, it then allows you to communicate with that consumer to thank them for buying product X and sharing with them that you gave them incremental value today when they purchased product X,” Harrison said. “So, it's not just earn and burn the points that happens with the traditional lag of communication, but you're getting proof of the purchase in near real time.”
Another example of how Smart Basket helps reduce friction is by allowing brands to automatically apply a discount at checkout so that consumers don’t have to use a coupon or enter a code, which can help increase redemption. Meanwhile, brands are getting UPC-level data that is valuable in how they connect with their customers going forward.
“You're effectively getting receipt-backed proof that the offer drove the sale,” Harrison said. “It's not ambiguous and it's not a black hole of paper coupon data or anything like that.”
How AI Agents are Changing Loyalty
Harrison stresses the importance of brands starting to build a strategy now to unseat incumbent brand loyalty in the agentic world. With agentic commerce, brands will no longer be selling directly to the consumer anymore, which alters how they will have to approach their loyalty programs.
This means that brands will have to think about connecting with both consumers and the AI agents working on their behalf.
“Once the consumer connection is made and an agent is shopping on my behalf, it's going to be difficult to unseat that brand because it's not necessarily a consumer making a decision anymore,” Harrison explained. “It's an agent that has been programmed to operate on behalf of that consumer, and the agent is always going to search and purchase a brand that I've told it to if I have a strong brand affinity.”
And part of building loyalty with both the consumer and the agent shopping on its behalf is creating that frictionless point of purchase.
“We've got to align with partners who can activate and measure value at the moment of payment and provide near real-time closed loop attribution and build offers that are easy to work with, easy to apply,” Harrison said. “Because in the agentic world, frictionless plus provable is going to win.”