FIS Says It’s Time to Make Loyalty Smart Again

Watch more: Digital Shift: FIS, David Keenan

Loyalty used to be emotional — a bond forged between a shopper and a brand. Today, it feels transactional, fragmented and costly. Merchants chase conversions, issuers fight for top-of-wallet status, brands compete for shelf space and consumers collect points they barely use. All four are paying for loyalty — and all four feel shortchanged.

The Misaligned Marketplace

For David Keenan, global head of payments networks at FIS, the fundamental problem is disconnection. “Think about our own lives,” he told PYMNTS. “Loyalty programs — whether on the seller side, your financial institution, or the brand itself — are [somewhat] disconnected when in fact they don’t need to be.”

Each stakeholder works in a silo: brands offer rewards at the product level, merchants at the checkout, issuers through card programs. None share data or insight into whether spending actually changes behavior. “The provider of the loyalty doesn’t have good connection to know when and where it’s working,” Keenan said, and must mull: “Do I know that the loyalty program I’m putting out there is creating the behavior change that I want? I don’t have good feedback on that.”

The result, he said, is a cost burden that has eroded confidence in the model. “The tools that were in place yesterday for providing loyalty are obsolete,” Keenan said. “They’re constrained.”

Rethinking the Basket

The answer, he argued, lies not in tearing down the system but in retooling it. “We believe it’s evolutionary, not revolutionary,” Keenan said. “The concept of points and rewards isn’t broken — it just needs better tools that let more participants get involved in the exchange.”

That toolset is embodied in FIS’s Smart Basket, an infrastructure that links merchants, issuers, brands, and consumers through shared data at the item level. Every SKU in a transaction can carry its own value — a value funded by the brand, surfaced by the merchant, delivered by the issuer and experienced by the consumer.

“Basket intelligence and item-level adjudication are extremely powerful in letting us unlock value contained in the choices you make,” Keenan said. “Your financial institution could offer an integrated debit-credit loyalty solution down to the item level. You could actually get the item in your basket paid for with loyalty points, while everything else is covered by your card.”

Loyalty Where the Shopper Lives

That shift brings loyalty to where consumers already shop. “We could let a brand go and participate by giving you a dollar off at point of sale — embedded and automatic,” Keenan said. “You get the benefit of loyalty to that brand, provided by that brand, at the place where you want to go shop.”

For brands, it means their promotional spend directly drives verified sales. For merchants, it means richer incentives that differentiate their offers. For issuers, it creates more top-of-wallet transactions. And for consumers, it means transparent value without the friction of chasing coupons or waiting for points to accrue.

“It’s powerful to think that when you go in and buy three items, you’ve actually made four choices relating to your loyalty,” Keenan said. “These are the three items you bought and the place where you chose to buy them. When we can tailor loyalty to all four of those choices rather than just one, it unlocks value that rejuvenates loyalty across the ecosystem.”

An Ecosystem of Shared Incentives

The Smart Basket approach, Keenan added, fosters collaboration instead of competition. “When you think about it, there’s a buyer, a seller and an item — all three want a successful outcome,” he said. “They want to attract and retain your loyalty. Providing better tools and a better platform to let them participate and reward you more specifically for your behaviors is the way of the future.”

By coordinating participants and letting them operate at the item level, FIS believes it can rebalance loyalty’s economics and rebuild trust. “We believe that breaking it down to those individual choices and letting participants all be a part of that loyalty down to the individual item choice is a game changer,” Keenan said. “It builds on that foundation of trust — that desire to get the most for your money.”

Built on Proven Rails

FIS’s plan is not theoretical. “Part of the Smart Basket solution is [already here. And] we’re building on three assets of FIS that are already operating at highway speed,” Keenan said. “This isn’t pie in the sky. We’re bringing together technologies that already provide item-level capability in the market and integrating them into a single platform that lets buyers, sellers and brands all participate.”

In that way, Smart Basket’s promise mirrors the evolution of payments itself — from isolated transactions to a networked ecosystem. The result is loyalty that’s not misplaced or displaced, but aligned — delivering value where it matters most.