The past year has seen a rapid acceleration towards digitization, which has given rise to new trends across every business sector, including finance. For example, a recent report from Deloitte showed the Bank of America’s business banking app witnessed a 117% rise in mobile check deposits across 2020. As a result, the need for banks to provide a compelling and personalized digital experience during every customer interaction has never been greater.
One of the key methods to achieve this compelling experience is gamification. A concept that had started to become familiar to many in the banking sector has now taken on even greater relevance as we work towards a post-pandemic world.
Gamification is essentially introducing game mechanics into non-game environments. This doesn’t necessarily mean creating an actual game (although it can); it is more about using the psychology behind gaming to make an activity more engaging. Gaming elements, such as point scoring or badge earning, are applied to moments within the consumer experience to make them more interesting and enjoyable.
At this point, it’s important to recognize the distinction between promotional competitions and genuine gamification. Promotional competitions or giveaways involve a single transaction in which consumers complete an activity in return for (the chance of) a single reward. It is a short-term value exchange designed to achieve a single business objective.
Gamification uses the dopamine hit that is received when we overcome a challenge to reinforce long-term behavior change and keep consumers coming back for more. Gamification techniques often prove successful because they tap into an individual’s social and emotional values rather than simply financial or material gain. The constant positive feedback encourages consumers to try harder, engage for longer, and forms a deeper emotional connection between the consumer and brand.
There are obvious reasons why banks should approach gamification cautiously. The biggest challenge is to carefully decide which elements of the user experience should be gamified. Customers don’t want to feel like the banks are playing games with their savings and may reject the proposition if they don’t feel that their hard-earned cash is being respected.
Despite this, the power of gamification is to make dull or uninteresting tasks more engaging. Unfortunately, for most people, banking is not a fun or enjoyable activity, and there is little attraction to learning more about the various services that banks have to offer.
“Games are everywhere, and banks need to take notice.” – Bank Automation News
The undeniable potential for both banks and their customers is already evident in sectors such as healthcare and retail. Embracing gamification has helped convey information, educate customers and motivate positive behaviors in these industries and can do the same for the finance sector. In addition, increasing the enjoyment and satisfaction of completing banking transactions will also increase brand loyalty and advocacy.
Banks that utilize gamification have the perfect solution to engage their customers and motivate them to keep using their services. The potential benefits for customers include:
- Introduction to relevant services or products – creating personalized recommendations for products or services.
- Increased financial literacy – simplifying the educational process to increase customers’ understanding of their financial situation and help them make better financial decisions.
- Creation of a personalized service – adding more value to your customer services through tailored tips and advice.
And the advantages aren’t just for the customers either; banks can benefit from:
- Zero-party consumer data – gathering and analyzing behavioral data from consumers will allow banks to improve services.
- Reach new customers – improved customer service is its own marketing strategy.
- Change customer behavior – instill a money-saving mindset and increase deposits by rewarding specific actions.
By increasing engagement and providing valuable Earned Data, gamification allows banks to provide a more personalized and human-focused experience.
Many banks have started to experiment with the opportunities that gamification has to offer. Whether to increase customer engagement, loyalty, or financial literacy, the result is a better service for consumers. Here are some examples of gamification in action:
To build a customer base that is emotionally invested in your brand, banks need to do more than simply provide a satisfactory service. They need to create engaging ways to show how to use their services and provide additional value to consumers. But how can you create more interest in a seemingly dull set of tasks?
Spanish bank BBVA took on this challenge as a way to increase customer engagement. They launched a series of helpful videos that showed how to easily complete everyday tasks such as paying taxes online. By completing the videos, customers earn points that could then be redeemed to download music and movies or participate in future giveaways.
It’s now been proven that it takes more than 21 days to create a habit; however, changing user behavior still requires repeatedly rewarding positive actions. To instill a money-saving mindset in consumers and help them reach their saving goals, a long-term engagement strategy is required.
PNC Bank, based in the US, created the Virtual Wallet to help customers ensure they can track their spending. Separating funds between accounts for reserved or spendable budgets makes it easier for customers to manage their finances. The gamified element is the effective Punch The Pig feature, in which users ‘punch’ the piggy bank whenever it pops up to add a pre-selected sum of money into their savings account. Users can decide how often the pig pops up or select to have it appear at random moments.
Brands that add value to consumers’ lives are going to reap the rewards of increased customer loyalty. Finance is linked to pretty much every element of our lives. Using this connection to make a bank synonymous with their customers’ overall wellbeing, not just their financial wellbeing, keeps the brand at the forefront of customers’ minds.
Finance and fitness are two things you wouldn’t necessarily connect in the same sentence, but Emirates NBD managed it to great success. The bank encouraged users to link their accounts to a fitness app that tracked their daily physical activity. Completing various levels and challenges allows users to earn redeemable points or a reward for reaching a certain goal, for example, 12,000 steps a day will get you a 2% interest rate.
Linking the feel-good factor of fitness with financial rewards is an effective way for Emirates NBD to impact other parts of consumers’ lives. They were also able to broadcast awareness through partnerships with companies like Adidas and Apple.
Complex areas of finance such as property investment can seem daunting for the uninitiated. Increasing the financial literacy of consumers is within the interest of banks so that they can make better decisions and feel confident in using the more complicated services that banks can offer. Gamifying this educational process makes it a more accessible and enjoyable way to review complicated financial considerations.
Australia’s CommBank released a property investment simulator that allows consumers to become familiar with this complex world without putting their own capital at risk. Investorville goes through a simplified process of buying your first property and the multitude of considerations that follow.
Working with actual property data, buyers can discover the consequences of their financial decisions and avoid potential stumbling blocks. Investorville is a much more accessible way of experiencing the process over reading and reviewing the facts and figures.
To build trust-based relationships, brands need to consider how they increase customer engagement with important communications. Providing personalized recommendations to individual customers can increase engagement, whilst ensuring customers get the information they need to make informed decisions. This can be achieved through gamification.
Extraco Banks needed to communicate to their customers that they were removing free checking accounts. This negative but important information was presented with game mechanics to explain the potential benefits of the change.
By walking through a series of questions, Extraco could recommend the best way for individual customers to reduce their new fees. Presenting this information in an engaging manner with immediate tailored advice, rather than a formal and inaccessible lengthy letter eased customers through the transition.
These are just a few examples of the potential ways that gamification can benefit the finance sector. While careful consideration should be given to how game principles are introduced to the user experience, gamification has the power to engage customers in otherwise uninteresting tasks. If your financial institution is looking to increase customer loyalty, better engage your customers, or improve customer service, get in touch and find out more about how gamification can accelerate your strategy.