Issues of regulation of loyalty programs in commercial banks

The regulatory challenges of commercial bank loyalty programs in Russia from a consumer perspective have been analyzed. The need for government intervention in the payments sector has been substantiated. The research methodology includes statistical, comparative, and correlation-regression analysis, a survey, and mathematical modeling. The study results reveal a paradox: despite the growth of cashback payments, overall customer loyalty has not increased, while the share of neutral customers is growing, indicating the payment card market saturation and the ineffectiveness of loyalty programs as a tool for attracting new custo mers. Unscrupulous banking practices (miscoding and unilateral changes to terms) and destructive customer behavior patterns (hobbyism and excessive lending), exacerbated by regulatory gaps, have been identified. The proposed solutions include legislatively enshrining the cashback definition, adding loyalty programs within the scope of behavioral supervision of the Bank of Russia, and using the All-Russian Classifier of Products by Type of Economic Activity instead of the All-Russian Classifier of Types of Economic Activity to combat miscoding. To neutralize behavioral factors when choosing programs, the authors developed and validated a model for calculating an effective cashback rate, implemented as a Python program, and proposed using it as a basis for applying a modified ten-second rule to make informed financial decisions.

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