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EDITORIAL
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Getting Closer to Your Next Moment: Canadians are Sitting on a Mountain of Value in Unclaimed Rewards.
“Millions of Rewards Across Canada” –Over two days in November, a mysterious mountain of blue packages appeared on the lawn of a Calgary home, sparking curiosity and chatter. The unexpected arrival — stacked high and spilling out in all directions — turned heads as Calgarians speculated about its origin. Today, after days of questions and buzzing onlookers, AIR MILES claims responsibility for the stunt and the packages revealed their secret: they represented hundreds of unclaimed rewards across Canada — a playful reminder about the value potentially waiting in collector’s accounts for them to claim.
“AIR MILES is the rewards program that wants collectors to redeem their rewards so they don’t miss out on what they’ve earned. With the value in collector accounts, Canadians have an opportunity to redeem their AIR MILES Reward Miles™ for millions of rewards that can be turned into meaningful moments. From dream vacations to that perfect Sunday morning cup of coffee from your Smeg Coffee Maker, and musthave items from coveted brands, there’s a bit of everything just waiting in collector accounts,” says Katherine Carl-Musson, Head of Marketing at AIR MILES. “This stunt is a powerful visual demonstration of the potential rewards waiting on the doorsteps of homes across Canada.”
At any given moment, a collector somewhere in Canada has enough Miles to collect a reward that’s been waiting for them in their account. To contextualize just some of the value that collectors could redeem, there are currently enough Miles in accounts across the country to claim*:
❯ 24,899 Dyson Airstrait™ Straighteners in Winnipeg
❯ 66,451 Apple AirPods 4 in Toronto
❯ 126, 215 Ninja Air Fryers in Calgary
❯ 10,888 KitchenAid® Stand Mixers in Montreal
❯ Tens of thousands of flights to Hawaii from across Canada
❯ Hundreds of thousands of gas fill-ups at Shell
To inspire collectors to check their account balance and explore the array of redemption options available, AIR MILES hosted an immersive activation in Calgary at 6 West Cedar Pl SW, West Springs, Calgary — the site of the home buried in blue boxes — on Saturday, November 9. Attendees had an opportunity to walk away with one of the hundreds of unclaimed rewards available on site – that dream flight, coveted home appliances, tech gadgets, and much more** — while sipping on complimentary hot coffee or tea and nibbling on mini donuts.
“Whether it’s hosting a brunch with a photo-worthy Smeg toaster, getting ready for girls’ night with Dyson’s latest hair tools, catching that flight for your bucket-list vacation or getting an early start on your holiday shopping by grabbing the latest gadgets for the people on your list, your Miles can help you collect more moments,” says Carl-Musson. “We don’t want our collectors across Canada to miss out on that special moment they’ve already earned. AIR MILES wants to give our collectors a reason to check their account balances and redeem their Miles–but not just those in Calgary, so we’re sweetening the pot with a special November Redemption event.”
The AIR MILES Reward Program is one of Canada’s most recognized loyalty programs, with over 9.5 million active collector accounts, representing more than half of all Canadian households. AIR MILES collectors earn Reward Miles at more than 300 leading Canadian, global, and online brands and at thousands of retail and service locations across the country. This activity powers an unmatched data asset that, along with world-class analytics and marketing capabilities, enables clients to accelerate marketing activities and ROI. It’s the only loyalty program of its kind to give collectors the flexibility and choice to use Reward Miles on aspirational rewards such as merchandise, travel, events and attractions, or instantly on everyday essentials, instore or online, through AIR MILES Cash at participating partner locations.
Sometimes, loyalty program participation comes with unexpected or just plain cute benefits.
Now, your movie snacking experience just got extended with epic snacks that deserve a sequel. As Canada’s self-described leading entertainment and media company, Cineplex introduced its refill program, providing even more value to your experience while you
enjoy your favourite movie snacks. Upgrade to a large popcorn or fountain drink in theatres nationwide to elevate your snacking to new lengths.
“A big part of enjoying a movie on the big screen are the snacks, so by offering our guests a free refill on their large popcorn and fountain drink, we ensure their favourite movie snack and drink doesn’t run out and more can even be enjoyed on the way home,” said Kevin Watts, Executive Vice President, Exhibition & Location Based Entertainment, Cineplex.
Upgrade to a large popcorn or fountain drink in-theatre or through Cineplex mobile ordering and visit the concession counter for one eligible refill same day, same visit. This offer is not applicable on delivery orders.
Cineplex is a top-tier Canadian brand that operates in the Film Entertainment and Content, Amusement and Leisure, and Media sectors. Cineplex offers a unique escape from the everyday to millions of guests through its circuit of 168 movie theatres and locationbased entertainment venues.
Cineplex’s contribution to this month’s column doesn’t end with popcorn.
In fact, it’s a much larger leap for the company. The company opened its first location of The Rec Room on Monday November 25 in the province of Quebec, adjacent to a new, premium Cineplex theatre, all part of the Royalmount district in Montréal. The Rec Room offers guests a playground of gaming, dining, live entertainment and the perfect spot for hosting parties or corporate events. Located above The Rec Room Royalmount, is a new Cineplex theatre which includes five auditoriums, each with recliner seating, laser projectors and wall to wall screens, and one with D-BOX recliners.
“We’re thrilled to be opening our first location of The Rec Room in Quebec,” said Ellis Jacob, President and CEO, Cineplex. “As the entertainment leader in Canada, we’re proud to have created a one-of-a-kind venue in the province that brings people together to enjoy movies, gaming and live entertainment, alongside delicious food and drinks. Our new Cineplex theatre, located directly above The Rec Room Royalmount, will give our guests the freedom to eat, play and watch a movie all under one roof, in this exciting new social playground.”
The Rec Room and Cineplex Cinemas is over 50,000 square feet of entertainment, featuring something for everyone: A central area to
play more than 80 amusement games, where guests can earn points and redeem them for prizes at Le Coin des Champions; Featuring duckpin bowling, pool tables and augmented reality darts with dynamic game challenges as you play; and a live entertainment space for the best in local talent including musical and comedy acts.
Cineplex Cinemas includes five auditoriums each with full recliners, laser projectors, wall to wall screens and D-BOX recliners offered in one auditorium. The opening of both venues has generated 200 local jobs.
The Rec Room also features sit-down and quickservice food and beverage options to enjoy:
❯ An upscale casual bar and dining area offering a selection of signature cocktails, shareable and handcrafted dishes, featuring a mural created by Montreal visual artist, Jason Wasserman.
❯ Eat while you compete! La Cantine features premium poutines, savory snacks and handhelds, and a sweet selection of madeto-order funnel cakes.
❯ A large outdoor terrace for gathering in warmer months, opening in Spring 2025.
❯ Enhance your movie going experience, by grabbing a bite or drink before or after the show at The Rec Room, taking the stress out of finding the perfect spot.
While each location is customized to the individual community, The Rec Room concept features multiple dining environments and a wide range of entertainment options including a large amusement games area featuring state-of-the-art simulation, feature attractions, and redemption games as well as an auditorium-style space perfect for musical acts, bands and comedians.
Meanwhile, Plusgrade, a global leader powering ancillary revenue solutions for the travel industry expanded its partnership with Flying Blue, the loyalty program of Air France and KLM, to launch ‘Subscribe to Miles’.
It’s an innovative service that transforms how members earn Miles. This new offering allows members to steadily build their Miles balance through simple monthly subscriptions, making reward travel more attainable than ever. The new Flying Blue subscription service delivers several key benefits for members: Automatic monthly Miles deposits directly
into members’ accounts; Choice of four flexible plans: Starter, Smart, Advanced, or Complete; most competitive rates on Miles available; simple way to save for future travel experiences.
Members can use their growing Miles balance for a wide range of travel rewards, including flights to desired destinations, premium cabin upgrades, partner hotel stays, and more. The subscription model ensures a steady accumulation of Miles, helping members reach their travel goals faster and more predictably.
“Expanding our partnership with Flying Blue represents an exciting evolution in how members can engage with their loyalty program,” said Ken Harris, Founder and CEO of Plusgrade. “The ‘Subscribe to Miles’ service makes earning Miles more accessible and predictable, helping members transform their travel aspirations into reality while creating sustainable ancillary revenue for our valued partner.”
“With ‘Subscribe to Miles,’ we’re making it easier than ever for our members to grow their Miles balance and achieve their travel goals,” said Benjamin Lipsey, SVP Customer Loyalty and President of Flying Blue at Air France and KLM. “This innovative subscription approach reflects our commitment to providing practical, valuable benefits that enhance our members’ travel experiences. By partnering with Plusgrade, we ensure our members have access to a seamless and efficient way to earn Miles.”
Plusgrade powers the global travel industry with its portfolio of leading ancillary revenue solutions. Over 200 airline, hospitality, cruise, passenger rail, and financial services companies trust Plusgrade to create new, meaningful revenue streams through incredible customer experiences. As the ancillary revenue powerhouse, Plusgrade has generated billions of dollars in new revenue opportunities across its platform for its partners, while creating enhanced travel experiences for millions of their passengers and guests. Plusgrade was founded in 2009 with headquarters in Montreal and has offices around the world. For more information, visit Plusgrade.com
Flying Blue is the loyalty programme of the Air France-KLM Group. Created in 2005, it now has more than 24 million members worldwide, who have access to a multitude of rewards and benefits, and can earn and spend Miles with a wide selection of airlines, commercial and financial partners. The goal of Flying Blue is to accompany its members at every journey, every day. Whether members are exploring the end of their street or the far corners of the world, Flying Blue is there to elevate each of these moments into unforgettable memories.
Canadian specialty retailer of pet food and pet-related supplies, released its Environmental, Social, Governance report for its most recent fiscal year end.
The second annual report provides an update of how the Company manages and measures key ESG factors that play a critical role in delivering its strategic, operational and financial aspirations.
“Building on a strong foundation of long-standing responsible and sustainable business practices, we took incremental steps in 2023 to enhance our oversight and management of key ESG factors,” said Richard Maltsbarger, Chief Executive Officer of Pet Valu. “The strength of our key success metrics is a clear indicator that our strategies continue to deliver better outcomes and value to stakeholders while pursing our mission to be Canada’s preferred pet retailer.”
Key highlights of Pet Valu’s 2023 ESG report include:
❯ Strengthened engagement with and support for our franchisees — supported establishment of a self-elected franchisee council for Les Franchises Chico Inc. (“Chico”), while introducing Safe & Ready assessments across that banner;
❯ Enhanced Animal Care Expert (“ACE”) working environment — invested over $1 million in new and upgraded safety technology, rolled out a curated program designed for high potential talent, and provided initial visibility into ACE ethnic diversity;
❯ Improved emissions intensity — consolidated parts of our distribution network into larger, modern facilities while advancing low emissions initiatives;
❯ Bolstered governance of supply chain — issued first report (“Modern Slavery Report”) summarizing policies, activities and due diligence processes used to manage the potential risk of forced or child labour in our supply chain;
❯ Fortified product safety & quality practices — required acceptable third-party social audits from all new proprietary brand manufacturers in Asia and South America.
“I am proud of the actions of our ACEs and franchisees, who embody Our Four Paws service model to deliver holistic value to devoted pet lovers and the communities we serve,” continued Maltsbarger. “Together with industry best practices and stakeholder feedback, we plan to make any further enhancements to our strategies and disclosures, while preparing for forthcoming disclosure obligations.”
Not to be left out, Pet Valu, the leading
Pet Valu is Canada’s leading retailer of pet food and pet-related supplies with over 800 corporate-owned or franchised locations across the country. The company is headquartered in Markham, Ontario.
BY ASHLEY MARRON
It started with a bang. The launch of ChatGPT, a groundbreaking AI chatbot, did not require any soft launches or fuse wire teasers.
Within 24 hours of its unveiling in November 2022, the new technology had become a global phenomenon as social media channels buzzed about its capabilities.
Seven years in development, its impact was immediate and phenomenal — within five days it
had amassed more than a million users, setting the pace for an unprecedented paradigm shift in the way businesses operate.
Now, almost two years on, with the world’s largest technology companies having launched their own platforms, AI continues to set the pace for cultural and technological advances in previously unimagined ways.
In the earliest days, the technology was used experimentally, in a range of simple processes, ranging from
crafting travel itineraries, to writing captivating fables and generating computer code.
Since then, it has drastically reshaped the business world, transforming how we work, access information, and analyse data.
Ethical considerations of AI for businesses
Benefits to businesses from AI include improved customer engagement through chatbots and virtual assistants, enhanced data analysis and insights for better
decision-making, and automation of repetitive tasks for increased efficiency. It has been applied to various business areas, including accounting, customer service, cybersecurity, human resources, and sales and marketing.
However, the technology has also introduced its own set of challenges, including ethical and privacy concerns, skill gaps in the workforce, and integration issues with existing systems.
While AI has undoubted benefits, it also has the potential
to exacerbate existing inequalities, as certain jobs become automated and others require specialised skills. The ethical implications of AI, such as data privacy and potential bias, require careful consideration and regulation to ensure its responsible development and deployment.
Use of AI in mind mapping software
As a business concerned with the provision of mind mapping software for business processes
and project planning, the rise of AI sparked conversations within our organisation about its potential to replace human jobs, including those involving creative thinking and problem-solving.
We quickly realised that, when it comes to mind mapping, AI is not a replacement, but rather a powerful enhancer, transforming the process into a more efficient and insightful experience. Every new map or project starts as a blank slate, and no amount of templates, videos, webinars, or white papers can fully eliminate the initial intimidation of that empty space.
Traditional mind maps have long been praised for their ability to visually represent ideas and relationships. However, AI is now injecting this process with a boost of intelligent capabilities, as we no longer need to second-guess what someone needs to think about.
Now, users can simply ask AI the question, and have the result mapped out for them. This transformative capability eliminates the uncertainty of starting from scratch, making the process faster, easier, and more intuitive for the user.
AI should not be about replacing human intuition and creativity — it’s about augmenting our capabilities, empowering us to think more effectively and achieve greater productivity.
Mind mapping tools can bridge the gap between human intellect and AI capabilities, creating a powerful synergy that unlocks new possibilities in brainstorming, learning, and problem-solving.
As AI technology continues to evolve, we can anticipate even more sophisticated and intuitive mind mapping tools. These tools will continue to enhance human thinking, empowering us to achieve greater results and unleash the full potential of our creative minds.
The future of AI in business will involve continued collaboration between governments, businesses, and individuals to address challenges and maximize opportunities presented by this transformative technology.
AI is likely to become
increasingly integrated into software and hardware, making it easier for businesses to adopt and utilise its capabilities. Success will depend on how it is leveraged to augment human capabilities rather than replacing them, creating a future where humans and AI work together in a complementary way.
Beyond automating individual tasks, AI is driving a paradigm shift towards unprecedented efficiency across entire business operations.
By automating repetitive tasks, AI allows employees to focus on more strategic and creative work, leading to increased productivity and innovation. A recent McKinsey study found that AI could potentially automate 45 percent of the activities currently performed by workers.
As well as automating processes, it can also streamline operations, and minimize errors, leading to significant cost savings for businesses. For example, automating customer service with AI can reduce the need for human agents, leading to lower labour costs.
AI can also analyse large datasets in real-time, providing insights that would be impossible for humans to process manually, enabling faster and more informed decision-making. For instance, AI-powered analytics can help businesses predict customer demand, optimise inventory, and personalise marketing campaigns.
AI’s ability to analyse vast amounts of data is transforming how businesses make decisions. The technology can identify patterns and trends in historical data, enabling businesses to predict future outcomes and make informed decisions. This can be applied to forecasting sales, identifying customer churn, and optimising pricing strategies.
It can analyse customer data to create highly personalised marketing campaigns, tailoring messages and offers to individual preferences, leading to increased conversion rates and customer loyalty.
AI can also analyse data to identify and assess risks, enabling businesses to take proactive measures to mitigate potential
threats. This can be applied to fraud detection, cybersecurity, and supply chain management.
The competitive disadvantage of AI refuseniks
In today’s rapidly evolving business environment, companies that fail to embrace AI risk falling behind. This lag creates a significant competitive disadvantage, including:
❯ Loss of efficiency and productivity: Competitors who utilise AI for automation and optimisation gain a significant edge in efficiency and productivity, leaving refuseniks struggling to keep pace.
❯ Increased costs: Inefficient processes and outdated practices can result in higher operating costs for businesses that haven’t embraced AI, putting them at a disadvantage in pricing and profitability.
❯ Reduced customer satisfaction: AI-powered customer service and personalised marketing, allow competitors to deliver exceptional customer experiences, while businesses lagging in AI adoption struggle to meet customer expectations.
The future of business –embracing the AI revolution
The transformative impact of AI, driven by the rise of AI-powered business tools, is only beginning to unfold. Businesses that embrace AI will be well-positioned to thrive in the future, leveraging automation for efficiency, data-driven decisionmaking for competitive advantage, and personalised customer experiences for loyalty. Those who fail to adapt risk becoming irrelevant in an increasingly AI-powered world.
As AI continues to evolve, the need for business leaders to understand and embrace its transformative power is becoming increasingly critical. The companies that proactively invest in AI and leverage its capabilities will be the ones shaping the future of their industries and setting the pace for the next wave of innovation.
ASHLEY MARRON is CEO of business software developer MindGenius, which recently launched an AI-driven version of its tool for mind mapping business processes and project management.
BY MAGDA OSMAN
Ken Murphy, CEO of
the British multinational supermarket chain Tesco, recently said at a conference that Tesco “could use Clubcard data to nudge customers towards healthier choices”.
So how would this work, and do we want it? Our recent study, published in the Scientific Journal of Research and Reviews, provides an answer.
Loyalty schemes have been around as far back as the 1980s, with the introduction of airlines’ frequent flyer programmes.
Advancements in loyalty schemes have been huge, with some even using gamified approaches, such as leaderboards, trophies and treasure hunts, to keep us engaged. The loyalty principle relies on a form of social exchange, namely reciprocity.
The ongoing reciprocal relationship means that we use a good or service regularly because we trust the service provider, we are satisfied with the service, and we deem the rewards we get as reasonable – be they discounts, vouchers or gifts.
In exchange, we accept that, in many cases, loyalty schemes collect data on us. Our purchasing history, often tied to our demographics, generates improvements in the delivery of the service.
If we accept this, then we continue to benefit from reward schemes, such as promotional offers or other discounts. The effectiveness depends not only on making attractive offers to us for things we are interested in purchasing, but also other discounted items that we hadn’t considered buying.
Does it work?
So is this the future? The first issue is whether we’re happy to have data collected on us. There
is a trade-off between the level of personalisation we want, and the amount of data we are willing to give. Research has shown that the more personalised the schemes are, the more alarmed we are about the crossing of privacy boundaries. For example, many of us dislike tailored communication about services through the use of chatbots.
The second, related point is that loyalty scheme data is, and will continue to be, of enormous value to third-party organisations. For instance, market research can use loyalty scheme data to track consumer trends more accurately. Researchers can use the data to make inferences about healthrelated behaviour.
As valuable as the data from loyalty schemes is for scientific purposes, not all shoppers are happy with having their data shared in this way. In one 2023 survey conducted by Yasemin Hirst from Lancaster University and colleagues of 1,539 people, 39 percent said they were unwilling to share their personal data with academic institutions, while 56.9 percent didn’t want to share with private organisations.
What data people were willing to share also varied: for example, people were happier sharing loyalty card data (51.8 percent) than social media data (30.4 percent) for research purposes. In general, people worried about privacy as well as misuses of their data.
All of this points to data privacy and permission being needed for sharing personal data with thirdparty advertisers and data brokers for people shopping online.
The final aspect is what the data reveals. Data from loyalty schemes does not present a complete picture of a shopper. We mix and match where we buy our food because of our budget and our geographical location. And some retailers have greater coverage and delivery in
rural areas than others — further influencing our behaviour.
This also means that our degree of loyalty provides only a partial picture of what we end up buying, and how healthy our habits are.
In our recent research, Sarah Jenkins and I conducted a study to look at issues related to what Murphy had in mind. We asked 389 people to evaluate ways their grocery shopping behaviour could be influenced.
We looked at three categories. One included financial incentives and discount offers. The second was classic “nudging” methods, such as labelling healthy or green options, campaigns or education schemes.
Finally, we looked at technological incentives that could be implemented via smart phones or laptops when making online purchases. For example, there could be suggestions as to nutritional choices, or an automated system that would select only healthy food choices. Alternatively, the system could score your shopping choice according to how healthy they were.
People assessed all of these options in terms of whether they could help boost healthy and green choices. Generally, participants preferred the financial methods overall, specifically discounts on healthy food options (44.7 percent). They also judged taxes on unhealthy food items as effective.
Campaigns for sustainability (6.3 percent) and automated choices for sustainability (6.5 percent), such as online shopping algorithms only offering us sustainable options, were least preferred. One possible reason for this might be a lack of understanding of what sustainability actually means.
Behavioural and financial methods were judged to be slightly more ethical than technological methods, though most people
found all options fairly ethical.
That said, techniques to nudge people’s behaviour in the right direction don’t always work. People like or dislike them depending on a mix of factors, including whether it seems effective, whether it is ethical and whether they actually have a desire to change their behaviour.
Across the different ways market researchers study our shopping trends, the same pattern emerges: about 25 percent of the time, we buy our groceries online. The precise percentage varies by country and by foodstuffs we buy, but in general the forecasts is that it will increase to about 45 percent in the next 5-10 years.
This will mean further innovations in loyalty schemes, designed both to attract new customers as well as maintain the current base. Retailers therefore need to be aware of the shortcomings of such approaches, including that they don’t work on people who don’t want to change their behaviour, that they only provide limited information, and that there may be a point where services are so personalised that many people become unwilling to share their data.
Some of us will continue to enjoy the benefits of these schemes, so long as we have the chance to exercise choice. Indeed, some want to have suggestions made that ease the selection of healthy or sustainable options, but others don’t. What matters is having a choice.
OSMAN is Professor of Policy Impact, University of Leeds. This article is republished from The Conversation under a Creative Commons license.
BY ALLISON KARAVOS
The past twenty years have seen incredible advancements in technology of all sorts (do we even remember life before the smartphone?) — and the world of financial services is no exception. But innovation is far from over. The financial sector stands on the edge of even more cutting-edge technology, with increasingly sophisticated tech emerging that will enhance decisioning accuracy, improve operational efficiency, and ensure maximum customer satisfaction and engagement. What’s ahead for financial services providers? While it’s impossible to predict exactly what the next twenty years will look like, we’re looking
forward to what may be in store in the near future, based on the tech innovations and market-shaping forces in play today.
1
Evolution in Ways to Pay, Borrow, Lend and More
There’s a variety of tech advancements on the horizon that could reshape how we pay for things, how we borrow money, and the landscape of financial services and products in general.
Some of these include: Biometric Payments: Payments authenticated through biometric data including fingerprints, facial recognition, or retinal scans, enabling a seamless (and secure!)
way to pay.
Voice-activated Payments: Payments initiated through voice commands via smart speakers or other voice-enabled devices, greatly enhancing convenience for users.
Invisible Payments: This includes transactions that occur automatically in the background (one level up from our automated payments for subscriptions for example), with IoT-enabled purchases that reduce friction.
Peer-to-Peer (P2P) Lending: These lending platforms will continue to evolve, using blockchain for transparency and security.
On-Demand Loans: Instant, micro-loans available on-demand via mobile apps, tailored to individual needs with flexible
repayment terms.
Tokenized Assets: Tokenization of real-life assets (i.e. real estate, art) enabling fractional ownership and lending, and providing investors with new opportunities.
The connected vehicle payments market could reach $600 billion by 2030.
2
The AI and Machine Learning Revolution
Already integral to processing large datasets, ongoing advancements in artificial intelligence (AI) and machine learning (ML) are set to continue to redefine risk decisioning and the entire user experience. Future algorithms will leverage advanced neural networks
and deep learning to enable nearreal-time decision-making by not only analyzing complex variables (including behavioral patterns and unstructured data), but also predicting results with uncanny accuracy. These advancements in intelligence will also further enhance personalization possibilities, facilitating the shift from static to dynamic risk assessment and accommodating for life changes and real-time behavior — greatly increasing the inclusivity and fairness of financial services offerings (and the customer experience!) along the way. Advanced analytics will also help financial services providers understand on a more granular level how people are using products, enabling you to make improvements, track the customer journey, and interaction points. Likewise, AI enables us to break down silos across different datasets, understand consumer behavior much more dynamically across different systems — and allow you to tailor new products and services accordingly. The applications when it comes to financial services are endless, including AI-driven financial advisors that can provide highly personalized financial planning and wealth management services, tailored to individual goals and behaviors.
As we’re already witnessing, Generative AI will continue to have a massive impact. It is certainly making life easier in many ways (chat bots, personalized email and marketing campaigns, dynamic customer management, etc.), but it will also mean greater ease in testing products and models as new data sets are generated (which used to take an incredible amount of time when done manually). Generative AI could also help test different use cases for products and UAT testing (which is traditionally very difficult and time consuming). We can also use Generative AI to translate videos and documents in realtime, or even do live translations in meetings, increasing the serviceable markets of financial services providers who may have previously been limited by language or region.
3
Quantum Computing: The New Frontier Quantum computing promises to fundamentally change the capacity to process information by performing calculations at speeds unattainable by traditional computers, enabling the ability to execute complex risk simulations and fraud decisioning and detection algorithms. This speed enables quicker, and more informed risk decision making for financial services providers. Quantum algorithms could simulate market reactions to economic events or stress test financial portfolios under a variety of conditions, providing insights at a speed and scale that just isn’t possible with today’s computation methods.
Globally, the financial services industry’s spending on quantum computing capabilities is expected to grow 233x from just US$80 million in 2022 to US$19 billion in 2032, growing at a 10-year CAGR of 72 percent
4
Blockchain and Decentralized Finance (DeFI)
Offering a decentralized and secure platform that can transform traditional banking infrastructure, credit approvals, and monitoring systems, blockchain technology can make big waves in risk decisioning, with advancements in peer-to-peer lending, smart contracts, and fraud screening measures. With transparent and fixed recordkeeping, the technology can streamline processes and reduce operational costs, automating credit decisioning and other transactional processes. And with blockhain’s inherent transparency, the reliability of financial data is improved, greatly enhancing fraud and identity management. When it comes to the increasingly important aspect of identity verification, blockchain can also be useful — enabling Self-Soverign Identity (SSI) and Decentralized Identifiers (DIDs). SSIs allow individuals to own and control their own digital identities, stored on a blockchain for maximum privacy and security, while DIDs use unique, blockchain-based
identifiers that can be verified across different platforms without exposing personal data.
There is around $52 billion of value locked in DeFI, and global blockchain spending is expected to hit $19 billion this year.
5
The potential adoption of digital currencies, including those issued by central banks (CBDCs) could dramatically alter the financial services landscape. Impacting how credit is managed and issued, these digital currencies offer new mechanisms for transparency and efficiency in financial transactions, with faster transaction times, reduced costs, and improved access to financial services, especially in underbanked/underserved communities. When it comes to risk decisioning, digital currencies can provide more streamlined and integrated data flows, enabling better tracking of financial behavior and transaction histories, ensuring more accurate risk assessments.
134 countries and currency unions, representing 98 percent of global GDP, are exploring a CBDC
6
The integration of the Internet of Things (IoT) in banking could provide continuous data streams to credit risk models, offering real-time insights into a potential borrower’s financial activities and habits, and ensuring more dynamic (and accurate) credit risk decisioning and lower default rates. For instance, data from smart home devices could inform lenders about a customer’s energy consumption patterns, which might correlate with financial stability or risk levels. This level of integration can lead to even more personalized risk assessments, potentially improving credit access and inclusion while mitigating risks for lenders.
IoT In Banking And Financial Services Market size is projected to reach USD $30925 Million by 2030, growing at a CAGR of 50.10 percent from 2023 to 2030.
7
With increased reliance on digital technologies comes increased cybersecurity risks. Robust security measures are critical, and future developments will include predictive and proactive security strategies to safeguard against continuously evolving cyber threats. The financial services industry’s vulnerability continues to grow, requiring innovative tech for protection like AI-driven threat detection systems that can predict and neutralize threats before they do damage. Proactive cybersecurity will become a critical component of risk management, ensuring that both customer data and financial assets are adequately protected. Advanced cryptography can also help with data security, including zero-knowledge proofs (allowing users to prove identity without revealing personal info, greatly enhancing data privacy and security), and homomorphic encryption, which encrypts data in a way that allows computations to be performed without decrypting. Financial institutions are the second most impacted sector based on the number of reported data breaches; ransomware attacks on financial services increased from 55 percent in 2022 to 64 percent in 2023.
8
Environmental and social governance (ESG) is a hotbutton topic across industries and can greatly affect financial services providers. Risk decisioning models will need to reflect the growing consumer and regulatory demand for responsible lending and banking practices and could even influence the overall strategy of financial institutions towards more sustainable and socially responsible operations. With a rise in conscious consumerism and corporate responsibility driving the integration of ESG into financial decision making, lenders can use ESG scores alongside traditional metrics to assess credit and fraud risk. This approach aligns with global sustainability goals but also greatly appeals to
a growing number of consumers (and investors) who place high value on organizations that prioritize ethical considerations in their operations.
Global sustainable finance product issuance totalled $717 billion in the first half of 2023.
As technological capabilities expand, so does the scrutiny around their implications. AI and advanced data analytics in particular will require the need for robust regulatory frameworks to ensure these technologies are used ethically and responsibly — including data privacy, preventing bias in AI algorithms, and maintaining transparency and explainability in AI-driven decisions. Financial services providers will need to navigate a world where regulatory compliance is about much more than just following laws, but also about maintaining ethical standards and ensuring ongoing public trust, especially in decisions that affect individual creditworthiness and privacy.
By the end of 2024, Gartner predicts 75 percent of the global population will have its personal data protected by modern privacy regulations.
The most critical aspect of offering loans or any other financial service is determining who you are dealing with and what the risk is. The way we identified individuals and their potential risk two decades ago was monumentally different than where we are today, and in the future this process promises to be even more seamless – and all-encompassing. We can expect even more dynamic verification codes to reduce the risk of fraud, highly-accurate DNA-based identification, genetic markers to be added to biometric identification systems, and more inclusive/accessible verification solutions that adhere to yet-to-beestablished global standards for digital identity. Also possible are multimodal biometrics, combining multiple identifiers including
behavior (typing patterns, mouse movements, gait) to continuously verify identity in real-time. Likewise, we can use wearable devices like smart watches and fitness trackers, as well as smart environment interactions (connected devices including smart homes, cars and workplaces) to verify identity, potentially reducing friction in the process.
Western Europe and Asia Pacific will potentially account for 50 percent of digital ID verification spend by 2028.
The
Technology has always had the power to drive significant change in all aspects of society, and future tech advancements will continue to alter how financial institutions operate and interact with their customers. A common theme running through all of these innovations is the ability to personalize products and offerings, highlighting the extreme importance of the customer experience. A prime example of this is dynamic, responsive onboarding — where financial services providers are tailoring the onboarding experience to individual customers by matching data checks (including identity verification, AML, KYC, and more) to the event risk and the responses of the customer. Depending on the consumer’s answers in an application, the actual application itself will change dynamically — populating additional responses required or minimizing friction with fewer questions if lower risk is determined.
Today’s consumers will no longer stand for long wait times, inadequate customer service, and mass-marketed products. Instead, a competitive edge requires rapid response times, omnichannel offerings, customized products, and frictionless experiences — all enabled by automated, real-time decisioning.
But the concept of ‘decisioning’ itself will also evolve. Currently financial services providers utilize specific triggers that result in a decision being made, whether that’s from the end-consumer applying for a product, or from a provider proactively analyzing data and making a decision to offer a new product. But with
the increased availability of data, extremely fast processing speeds, and the enhanced use of AI to analyze data and behaviors, decisioning will become much more fluid. Rather than trigger points causing a decision, are we in for a future where decisions around customers and products/ services are just continuous? Seamless? Always happening? This too will result in more hyperpersonalization and a customercentric approach in all aspects of
financial services. Done well, personalization at scale for banking customers can lead to annual revenue uplifts of 10 percent.
ALLISON KARAVOS is the Senior B2B Content Marketer, Writer and Leader at Provenir.
As these technologies develop, Provenir continues to lead the charge, offering an advanced decision intelligence platform that is adaptable, efficient, and strategically forward-thinking. Provenir’s mandate is managing risk in a technologically evolving landscape.
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BY STEPHEN SHAW
When Apple suddenly incurs the wrath of the public for a cultural gaffe, it is clear times have changed.
The offense was committed earlier this year when Apple released a 10-minute video titled “Out of Office”, the latest installment in a lighthearted promotional series called “The Underdogs”, which follows a team of co-workers as they travel to Thailand on a quest for a new packaging factory. While overseas they have to overcome various local challenges such as language barriers, quirky locals and less than swanky accommodations. The film’s depiction of the country’s culture outraged Thai citizens and officials who felt it misrepresented them, forcing Apple to shut down the video after calls for a nationwide boycott.
It was a rare misstep for Apple which is of course famous for its deft touch at tapping into the cultural zeitgeist. But Apple is certainly not alone in inadvertently trampling on cultural sensitivities. There are many ways for marketers to go wrong anytime they venture across cultural boundaries. Cultural values and norms can vary dramatically from one part of the world to another, from one segment of society to another, and those differences are not always understood by brand marketers who are trained to bucket everyone according to their demographics and lifestyle.
Marketers can also go wrong when they attempt to exploit a new social trend. Think of the conservative backlash to Bud Light’s social media promotion featuring the transgender influencer Dylan Mulvaney. Or the infamously tone-deaf commercial showing Kendall Jenner handing a police officer a can of Pepsi in what was seen as a shameless attempt by the beverage company to co-opt the Black Lives Matter movement. And then there was of course Gilette’s widely mocked attempt to piggyback on the #MeToo movement with its “toxic masculinity” ad.
These days it’s riskier than ever for brands to take a stand on hot button issues or show empathy for marginalized groups in society. Some progress was made following the racial strife of 2020, when companies “woke up” to the need for a diverse and inclusive workplace. But then the cultural wars erupted between the “anti-woke” activists and social justice warriors. Today no brand wants to invite a boycott of their products, so many have backed off the idea of openly pushing for social change.
Still, many people want companies to do what’s right — to be socially conscious — especially the under-30 generation who expect brands to be a unifying and positive force in society. But in order for brand marketers to serve as agents of change, they must first become more attuned to the social changes going on around them, and be hyper-aware of cross-cultural differences.
In short, marketers must strive to raise their level of cultural knowledge, according to Anastasia Kārkliņa Gabriel, a cultural theorist with a doctorate in cultural studies, whose current job at Reddit is to help brands do exactly that. In her book “Cultural Intelligence for Marketers”, she lays out a pragmatic framework for more inclusive marketing. Despite her corporate role, she remains a social activist at heart, and a self-described “revolutionary”.
Stephen Shaw: In your LinkedIn profile, you describe yourself as a revolutionary. I don’t know many marketing people brave enough to actually describe themselves that way.
Anastasia Kārkliņa Gabriel: I absolutely love that we are starting with that question! It’s probably one of the most interesting questions I’ve gotten at the beginning of an interview. If you had told me five years ago that I would go into marketing, I would have laughed, because that was completely opposite of what I was doing. I was studying culture, and very active in social political issues. And now I really see that
as my biggest superpower in marketing.
A lot of times as marketers, we look at the brands that we work on from a very commercial lens. But most people don’t think about brands in the same way that we do. And so I really draw on my activist background to think about what people want from brands.
The revolutionary part of me comes from wanting to challenge ideas, to question the things that we take for granted, because I truly believe that is what drives innovation, drives new ideas, drives new thinking. And so while I’m no longer on the front lines of a protest, demanding change, I’m very much thinking about change and innovation in my work. And really the core of what I do is to push us as marketers towards new ideas, new ways of thinking, so that we can be better. So that’s why I still identify as a revolutionary in my work.
SHAW: What drew you into the world of marketing?
GABRIEL: I vividly remember sitting at my desk as a fifth year doctoral student, having just received a fairly prestigious fellowship that allowed me to be free of any kind of teaching or research responsibilities. And that was any academic’s dream, to just sit at my desk, research, write, immerse myself in knowledge. And as I remember sitting there, I realized that I didn’t want to do this for the rest of my life. And the reason I felt that way was because I’m so passionate about what cultural knowledge can do for the world. And I realized I was studying culture primarily by looking back at what has happened, looking at the history that has shaped art, literature, society at large. And I thought to myself, no, I want to be immersed in culture as it is happening. And this knowledge that I’ve acquired through my academic training could be so valuable in shaping policies, ideas, and strategies. And so at that moment, I realized that my whole trajectory of being an academic and following a traditional tenure track might not actually be what I want to do.
And so I went out and started talking to marketers, consultants, strategists, until I stumbled into cultural insights and strategy work. And in that moment, about a year after that realization at my desk, I thought, oh, this is it. This is a space where I can apply my training in a way that influences culture and actually shapes the future rather than just study the past.
SHAW: There can’t be too many other marketing specialists as well versed in cultural knowledge as you.
GABRIEL: I transitioned at a very opportune time, after 2020, when a lot of brands realized they hadn’t been paying enough attention to issues of identity and inclusion. So at that time, a lot of agencies were looking for expert voices who could help brands navigate that moment and create strategies that would resonate with audiences in a way that was sensitive, inclusive, and ultimately commercially profitable and
viable. Since then, I have expanded my focus to talk about culture through the lens of marketing more broadly, precisely because so much of what we do as marketers is thinking about cultural trends, about where culture is headed and how it is affecting consumer behaviour, how it is affecting the customer journey. And so now a lot of my focus is really helping brands understand where culture is headed and how it impacts marketing as a whole. Because so much of what brands do today is to show up in culture to capture attention and be relatable and relevant.
SHAW: You’re currently Senior Lead in Global Insights at Reddit where your job, in your words, is to decode culture. I love that expression. But what does that mean exactly? And what attracted you to Reddit to begin with?
GABRIEL: I oversee the insights function and work with our sales teams and external agency and brand clients to activate what I call cultural knowledge: asking what matters to people, how do people create meaning and how we leverage that knowledge to be successful. Coming from an academic background, Reddit was such a fascinating place to work and continues to be, because it is a platform that houses thousands of communities of people who are talking about everything, from sharing videos of their dogs, to their patient journey with some form of illness. And the depth and richness of those communities is really fascinating to think about as people seek belonging and authenticity.
SHAW: Is this directed research where brands come to you and ask about the cultural trends in a specific category, or are you extracting insights and then offering it as a value added service to brands?
GABRIEL: Brands can partner with us in a variety of ways. We do work with clients on custom research projects where we provide deeper human insight into their audience. And there’s also broader work that we do in terms of advertising on Reddit. There is an opportunity for brands to show up on the platform in the context of people’s passions and interests and be part of those conversations. And so our role is to help our clients do just that.
SHAW: By that you mean understand how to participate in the conversation as opposed to simply talking at people.
GABRIEL: Exactly. And to leverage the power of contextual marketing. So appearing in the context of where people discuss their passions, needs, problems. You wouldn’t want anybody following you at a party trying to sell you something.
SHAW: It must be an absolute goldmine of insight to probe the trends in these conversations. In your work, are you aided by specific tools that help with that process?
GABRIEL: Oh, absolutely. We work with a variety of research methodologies. So that would involve a lot of standard social listening
that we conduct, but also a lot of custom work. So designing custom surveys and research studies for our clients, which really speaks to my academic side and something that I enjoy doing quite a bit.
SHAW: In your the book you state that understanding culture isn’t optional, it’s essential. Can you define cultural intelligence and then just explain why you think it’s essential.
GABRIEL: Cultural Intelligence is the practice of tracking and analyzing cultural signals and movements, consumer behaviour within culture, and the commercial and social implications and then acting on that knowledge. A lot of the time in marketing, cultural intelligence is thought of as having empathy for people. And so I wanted to help marketers understand culture from the perspective of what’s dominant versus what’s on the horizon and what’s emerging.
SHAW: And you believe it’s essential for what reason?
GABRIEL: Largely because brands draw on culture to appeal, to connect with and to speak to their customers. Every single brand draws on the outside world for inspiration of how to connect with customers. Brands are drawing on cultural codes of what’s meaningful to people. Nike, for example, drew on the trope of athleticism and excellence in performance, yet the meaning often shifts and changes and is affected by the way that society evolves. So, for example, the body positivity movement, and increased attention to women’s representation — those are not just social impact issues. Those are the expectations that all consumers are forming of brands and the kind of marketing that they want to see.
SHAW: How did the concept of cultural intelligence emerge in business to begin with?
GABRIEL: Cultural intelligence emerged as a response to increased globalization and the reality that doing business meant that one would have to engage teams across cultures that one might not have been exposed to in the past. It allowed professionals to expand their worldview and form stronger business partnerships and bonds across markets, across cultures, across the world. But in marketing the focus is not just on working with cross-cultural teams, but rather connecting with audiences and customers that might have different cultural norms, that might have different expectations, and that might have their views, perspectives and needs shaped by their lived experiences. And I think that is particularly important in multicultural societies like the United States or Canada, UK, you name it, where we realized at some point that marketing was too focused on the dominant audience. And as an example of that, we see a shakeup in the world of beauty, where for the longest time, people with darker skin tones could not find beauty products that
matched their skin tone.
SHAW: How would you describe the state of cultural intelligence in marketing today?
GABRIEL: We are in this moment of transformation, I believe, where it is not just about doing right for the sake of being an activist brand, which might have been the case in 2020, when a lot of brands awakened to this need to connect with social issues. But we are increasingly, I think, seeing that kind of inclusive marketing permeate all aspects of marketing strategies as a way of connecting with consumers on a deeper level.
What I would like to note as an example is that long before the Bud Light fiasco, which is often used to show that inclusive marketing doesn’t work, Bud Light used to be a proponent of LGBTQ communities and marriage equality. We forget that social consciousness in marketing matters to more and more brands, simply because culture is evolving, and consumer’s expectations are evolving.
SHAW: The other trend, until there was a backlash around it, was the concept of brand purpose. Would you also call that out as an inflection point, where brands felt it important to take a stand?
GABRIEL: Yes, I would say that there obviously has been a lot of pressure on brands to be purposeful, to be socially engaged. However, I do think that what we’re seeing now, certainly in the last twelve months or so, is the pendulum swinging back. And I would even argue that it’s swinging too far back where we are seeing a lot more commentary from marketing leaders about how brands should go back to “being funny” and how purposeful marketing has hijacked creativity.
You know, who says that brands cannot be funny and entertaining without also being socially responsible? And what might happen if brands actually combine social responsibility with humour and position themselves as brands that haven’t lost touch, that can make audiences laugh, that can be entertaining, that can be relatable, and yet can be socially responsible. And for that reason, I perhaps differ with some of my colleagues who do believe that every brand should have a social purpose. From my perspective, I am more interested in embedding inclusivity across marketing strategies and focusing on how every brand can be socially responsible and inclusive in representation, and storytelling, and creativity, without needing to lead with social purpose.
SHAW: I think the problem, to some degree, is the conflation of brand purpose with advertising and communications. The role of purpose is to help an organization do the right thing. Which brings me to the capability of marketers to actually lead change. Because the knock on marketers is that they don’t have the gravitas, the temerity, the courage, if you
will, to lead radical change. They’re followers more than leaders. Does that make it difficult for a marketer to try to stand up and say, no, we need to do the right thing? Do you see marketers as change agents?
GABRIEL: I do. If anyone has ever tried to advocate for something, they know that any sort of progress is hard. As marketers we have to know how to be an unpopular voice in the room. My book is not meant to say that every marketer needs necessarily to lead the charge of revolutionizing marketing, but that every marketer should feel empowered to understand the impact that they have on culture. I also think that the new generation of marketers wants to do more meaningful work.
SHAW: There is a significant generational change underway, and hopefully that does drive change. But the other thing you mentioned in the book is that inclusivity, cultural representation and social responsibility are the future of marketing strategy. Yet at the same time, you also point out that the marketer’s job, at least today, is to persuade. How do marketers reconcile those goals?
GABRIEL: Research by the Association of National Advertisers suggests that only about 11percent to 13 percent of the U.S. population are actively opposed to issues of culture being included or represented in marketing and advertising communications. And 76 percent of the population say that they are comfortable with seeing inclusivity and diversity in marketing materials. For that reason, we need to shift our mindset from all brands needing to be brand activists to actually infusing inclusivity, diversity, and equity into research, into insights generation, so that it becomes more ingrained into how we understand audiences, how we speak to them. If anything, when we do that, our persuasion is going to become more powerful because we’re not just going to be shouting from the rooftops about our values as a brand, we’re actually going to use the power of inclusion and diversity to understand our customers, what they care about, what that looks like in their everyday reality and their everyday lived experiences.
SHAW: In your book you cite the women’s shaving brand Billie as one of your best-inclass examples of how brands can be more culturally intelligent. How did they get it right?
GABRIEL: Billie is a prime example of what it means to understand the category as it intersects with culture. Billie used to be a direct to consumer brand of women shaving products, and now you see them all over. They completely disrupted the category by showing in their marketing and advertising communications women with body hair and in 2018, that was scandalous. That earned them a lot of headlines, and a lot of rage from social media because they dared to show a woman shaving their armpits or legs where you could actually see body hair.
Why is that such a great example? Because they recognized and acted upon a cultural movement toward body positivity and women’s empowerment. And so they earned a following, a loyal customer base. And from there, they evolved over the years to speak more broadly to women’s issues. I think that’s a fantastic example.
SHAW: What are the biggest mistakes that marketers make in this whole area of cultural intelligence?
GABRIEL: The examples of marketing that has failed really have one thing in common: jumping on an issue to say something for the sake of seeming relevant and relatable without really understanding how the brand exists within that specific aspect of culture, without thinking how those values are actually reflective of the organization. It is when brands state that they value certain ideals and then not being able to live up to them.
SHAW: In other words, being hypocritical. GABRIEL: Right. We always say actions speak louder than words. I think when it comes to brands engaging customers, the same kind of logic applies. If a brand is going to engage in a social issue or speak to some kind of cultural topic, then it is imperative for a brand to have some kind of partnership by amplifying the voices from that community, rather just speaking at their customers.
SHAW: What do you see as the challenges that most organizations face if they want to get there faster than they might otherwise?
GABRIEL: The tension between purpose and profit, between ethics and business, between being moral and commercially successful. As a culture and a society, we have accepted this belief that making profit without consideration for ethics is acceptable. We have normalized that thought. And maybe that’s where my revolutionary spirit comes in. Well now, consumers, particularly young people, are challenging that.
I don’t necessarily place the whole idea of social responsibility on marketers. But I do think at the organizational level, we need to ask the question of how do we do business in our society? And that certainly exceeds the role of marketing as such. Because at the end of the day, marketers, and this is just the reality, are operating under tight budgets, short timelines, and limited resources. But it is our responsibility to make our marketing more inclusive, more attentive to issues of diversity and equity.
SHAW: So how do organizations resolve that dichotomy between ethics and profit?
GABRIEL: I think it’s important to support a move towards organizational change where questioning the accepted norms is more welcome and more appreciated and more understood as part of what it means to market in an increasingly diverse world.
SHAW: We’re living in this polarized world of opposing worldviews and culture wars. Do you sense that brands are now starting to retreat, to move backwards in the face of potential acrimony?
GABRIEL: I think you’re absolutely right. And if anything, the talk I gave at Cannes Lions just a couple months ago was specifically focused on cultural intelligence in times of uncertainty. Should brands speak up or stay silent? And as you might have picked up, I’m very passionate about breaking away from binary thinking. We might not have easy answers, and we might need to make some decisions and choices that feel uncomfortable. But the solution to me is not to completely throw our hands in the air. And so a better question to ask is how should brands engage in culture? And for some brands that have historically been more socially vocal, it might make sense to stand by their commitments because that is what their customer base expects of them. For other brands, it might actually mean spending time understanding how they can act on their values in ways that don’t just include being actively outspoken. For example, Lyft, recently launched an initiative that allows women riders to opt into the program where they are matched with a female driver whenever that is possible. So we need to ask not if, but how, we can arrive at more creative and innovative ways to be engaged in culture.
SHAW: A thought experiment for you. Let’s just say you’re working with a global brand, and you find yourself in the elevator with the CEO of the company. You have two minutes to make a pitch on the criticality of cultural intelligence. What would that elevator pitch be?
GABRIEL: Oh, that is a really good question. Well, good marketing is rooted in data driven decision making. So today we know that for every customer that will reward the brand for backing off on their stated social commitments, there are four to five customers who will reward the brand for staying true and authentic to what they say they believe. So cultural participation is not a matter of morality. It’s a wise business decision.
SHAW: Well, if I can shorten that pitch, it’s “just be human.”
GABRIEL: Absolutely. Understand your audience. Take time to really understand how people create meaning and what matters to them.
STEPHEN SHAW is the Chief Strategy Officer of Kenna, a marketing solutions provider specializing in delivering a more unified customer experience. He is also the host of the Customer First Thinking podcast. Stephen can be reached via e-mail at sshaw@kenna.ca
BY RICHARD SCHENKER
The airline industry in Canada and worldwide has gone through the single most collective economic disruption as a result of COVID-19. The good news for airlines is that travel is back but the economic woes of COVID have had a lasting impact on airline operators. The continuous rise in the cost of operations including but not limited to airline pilot contract hikes, higher fuel costs and rising airports costs all continue to be a reality for WestJet and other airlines.
It should not be surprising to any loyalty industry observers or passengers, that just like its airline peers, WestJet has had to review the P&L of its frequent flyer program given the consequences of this economic paradigm shift. Like other airlines, WestJet has had to build new safeguards into WestJet Rewards to future proof its financial viability. In doing so, WestJet has begun to drip feed to the public some of their WestJet Rewards changes and enhancements. These modifications are intended to modernize the program to keep it competitive, live up to new economic realities and lay the foundation for future program evolutions.
To its credit, WestJet has not
made any wholesale changes to WestJet Rewards since 2018. Most airlines have had to make at least one round of program changes and reward devaluations in light of COVID-19 and the resulting economic conditions endured by the industry. For its part, WestJet did not approach this hastily, nor did they introduce any knee-jerk reactionary changes, during or at the tail end of COVID-19.
Rather they spent time analyzing and balancing their business needs and the expectations of their members. Some industry observers and customers might be quick to judge these changes, but I would caution that what was shared by WestJet last week, is likely only part of the equation and there is likely more goodness to come for program members in the short and long term.
With any frequent flier program, the operator is always challenged to distribute their investment in benefits disproportionately towards those members who are most profitable vs. those members who are less profitable. In doing so, WestJet has announced several changes which will right size and future proof WestJet Rewards, so they do not have to follow the flight path of other airlines that have had to make several subsequent changes or
devaluations to their programs. A decision to change status tier eligibility is not one that is taken lightly in this industry. Airlines understand that some members will be adversely impacted and there is risk of customer attrition and market share loss.
Last week, WestJet shared that they will be changing WestJet Rewards status spend thresholds. The Silver status threshold will move from $3,000 to $4,000 in spend. Gold will move from $5,000 to $6,000 in spend and Platinum will move from $8,000 to $10,000 in spend. These increase sizes are not inconsistent with competitive practices. Ironically, with the industry rise in airfares, it makes it somewhat easier to achieve these new thresholds, especially for frequent fliers. These changes in spend requirement were likely necessitated by three contributing factors:
❯ Too many members were attaining top tier status, therefore making it feel less exclusive and coveted.
❯ Too many members were trying to extract benefits inside of top tiers, making it difficult for the airline to provide a consistently available and delivered benefit – this precipitates the erosion of confidence of very best customers and can lead to
attrition.
❯ Too many customers were overrunning costs in the top tiers.
WestJet’s decision to move their status tier upward will help to redistribute their investment towards those members who are most profitable for the airline. As a goodwill gesture and in recognition of members attainability of status, WestJet will honour status level benefits through to the end of 2025, for all members who have reached their respective status in 2024, under the prior spend thresholds.
In the same vein of ensuring that very best members have the ultimate experience delivered consistently on each flight, WestJet Reward Platinum members, travellers booked in Premium and Business Class will be the only customers who board first in Zone 1. Previously Gold members where eligible for Zone 1, but the sheer volume of members, diminished that sense of exclusivity of this coveted benefit. This change is inline with delivering the most preferred access experience with a brand’s very best and highest paying customers, while still maintaining an efficient and elevated boarding experience for top tier members, including Gold.
As well, there are several changes being made to Milestone Rewards. Currently Milestone Rewards are achieved when a member first reaches $4,000 in annual spend. WestJet has reduced that spend threshold to $2,000 to expand its reach to more members and in turn will invest more value to a larger member population base. It is a wise calculation as this move should act as fodder to motivate more members earlier along the path to attain their next status level. While some of the rewards have been dropped there are some newly minted rewards being offered in 2025 at this level including a choice between a $20 WestJet Gift Card, $200 qualifying spend or a $25 Gift Card to WestJet partners including SKIP (a newly formed partnership) and others to be announced. It should be noted that WestJet Rewards has reoriented the milestone awards to be less frequent at the higher spend levels, and it would make sense for them to introduce some excitement into this element, in addition to the other changes planned.
In the spirit of adding flexibility and choice to a member’s experience, WestJet also announced that all members who have earned Companion Vouchers in 2024, will now have an additional year into the end of 2025 to redeem them. Similarly, moving forward in 2025, all earned Companion Vouchers will carry a 2-year expiry date, doubling the current expiry of 1-year. This will afford members additional time and flexibility to plan their trips and
redeem this valuable benefit.
Airline loyalty programs are among the most complex in the loyalty industry and are intrinsically tied to the revenue management of the airline. Decisions to make changes, are not for the faint of heart, as they can have profound consequences on customers and the business at large. WestJet is about one quarter of the size of Air Canada and has had to make several critical decisions to compete for Canadians’ airline share of wallet domestically and internationally. Having a healthy and viable loyalty program is a critical ingredient for success. We can expect to learn about additional WestJet Rewards’ plans to enhance their members’ experience in the months to come.
RICHARD SCHENKER has previously consulted to WestJet and Air Canada. He is a highly accomplished customer engagement thought leader, loyalty practitioner and partnership curator who has designed, renovated, and managed some of the world’s leading customer loyalty programs. He has an impeccable track record of success at enriching transactional and emotional relationships between iconic brands and their customers, across multiple business sectors. Richard has spent the first half of his career in senior loyalty roles with the Hudson’s Bay Company and Shoppers Drug Mart and the remainder of his career in leadership roles with leading loyalty agencies, Air Miles and Bond Brand Loyalty. Currently he is the Founder & Chief Customer Engagement Officer of Loyal Strategy Consulting, a consulting firm focused on enriching customer loyalty for leading brands. Richard can be reached at: rschenker@loyalstrategyconsulting. com or visit: https://loyalstrategyconsulting.com
BY STEPHEN JOHNSTON
As Canada confronts the dual challenges of high inflation and low growth, the specter of stagflation looms large. Stagflation, which refers to below-trend economic growth combined with above-trend inflation, erodes real GDP per capita and poses significant challenges for investors. The current macroeconomic and regulatory environment in Canada has hindered capital formation, and without increased capital generation, sustained improvements in the standard of living are unlikely to materialize. At its core, the issue is one of savings and capital. Capital formation is the backbone of economic growth and ultimately depends on the size of the pool of savings. Unfortunately, Canadians exhibit relatively low savings rates and this is exacerbated by a propensity to allocate what limited savings they have or even worse borrowed funds towards consumption rather than productivity-enhancing investments. In short, Canadians consume more than they produce, which in turn leads to declining capital formation and poor labor productivity. Canadian labor productivity investments, for instance, are nearly half of what is seen in the United States, creating a growing gap that continues to impede the country’s economic growth.
Even though it is difficult to precisely forecast the duration or severity of Canada’s current trends, investors would be wise to have some doubt that Canada’s stagnation will end quickly. As Goethe wisely noted, “Doubt grows with knowledge.” We must
approach the issue with a forwardlooking investment strategy, considering the limitations of past approaches. The economic conditions that fueled growth and returns over the last two decades are unlikely to deliver similar results in a higher inflation, lower growth environment.
In periods of stagflation, traditional investment strategies — such as the classic 60/40 portfolio of equities and bonds — face heightened risk. Historical precedent from the 1970s, when Canada last experienced stagflation, illustrates that investors with overly concentrated allocations in traditional assets were exposed to significant downside risk. The data is clear: in such environments, it is crucial to adopt a diversified strategy that incorporates assets with inflationary resilience.
Middle-class households, a key driver of consumption, are often disproportionately impacted by stagflation, facing both rising costs and stagnant wages. This phenomenon, known as the socioeconomic barbell effect, has been unfolding in Canada for decades, and this ongoing shrinking of the middle class complicates the investment landscape. The resulting shift in income distribution must be factored into investment decisions.
Despite the challenges of a stagflationary economy, there may still be opportunities for above trend growth if portfolios are structured correctly. Real assets — often referred to as “hard assets” — have proven well-suited for inflationary periods. These assets have historically outperformed in environments characterized by rising inflation. Canada is uniquely
positioned in this regard, with a wealth of competitively priced real asset opportunities which are trading at relatively low valuations compared to equities and bonds, offering investors an inflationary hedge.
Conversely, some of Canada’s most popular alternative investments — particularly residential and commercial real estate — may face headwinds. Elevated and volatile nominal interest rates, combined with stretched valuations in key markets, suggest that real estate assets may underperform in a stagflationary environment — it certainly did in the 1970s. Investors should carefully assess their exposure to real estate and consider reallocating capital toward assets that are better positioned to benefit from inflationary and/or recessionary pressures.
In addition to real assets, a stagflationary economy may present opportunities in sectors less reliant on broad-based economic growth and more tied to specific return drivers. Two examples include:
1. Automotive Maintenance: In times of economic stress, consumers are more likely to delay new vehicle purchases, leading to an aging vehicle fleet.
As a result, demand for basic automotive maintenance and repairs increases. This shift presents growth opportunities in automotive services and aftermarket parts, particularly as new car sales decline and the average vehicle age on the road rises.
2. Farmland: Canadian farmland represents a unique, valuedriven investment opportunity, particularly in an inflationary
environment. As a productivityadjusted hard asset, farmland offers significant upside potential, especially given the inelastic demand for agricultural products. Canadian agriculture is highly export-driven, serving economies with more robust growth prospects. Farmland tends to perform well during stagflationary periods due to its ability to generate steady returns from the production of essential, non-depleting commodities.
Should the Bank of Canada and federal policymakers continue to grapple with the conflicting pressures of low growth, above trend inflation, and high nominal interest rates, it is likely that Canada will experience a prolonged period of economic stagnation. In such an environment, investors must look beyond the strategies that have driven returns over the last two decades. Allocating capital toward real assets, such as commodities, while exploring targeted investments in sectors like low-cost casual dining, automotive maintenance, and farmland, may be critical for preserving wealth and generating returns in a stagflationary market. By adopting a diversified, forwardlooking strategy, investors may be able to mitigate the risks posed by stagflation and position their portfolios for long-term success.
STEPHEN JOHNSTON is director of Omnigence Asset Management – a multi-strategy alternative asset manager with almost $1 billion in capital across its partner funds in farmland and private equity. Johnston has a BSc. (Genetics, 1987) and a LLB from the University of Alberta (1990) and an MBA (1994) from the London Business School.
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