How to Use Gamification in Banking

How do you feel about gamification in banking? Usually, people are either skeptical about it or see it as a fresh approach to providing banking services. Gamification has already gained ground in many business domains, but the rigid world of banking may not be so eager to let it in.

What is gamification in the business environment?

Modern consumers are picky and bored with businesses big and small trying to force-feed them goods and services. Today, businesses need new, sometimes surprising approaches to customers and experiences. That’s where gamification can help. A game adds spice to the most conservative of approaches and makes business efforts easier to perceive.

Statistics tell us that gamification as a business approach is entirely justified. It’s no joke: gamification is a serious multi-billion-dollar business. Companies are trying on game mechanics such as quests, ratings, and levels to achieve various internal and external purposes. Just look at projections for the gamification market. The forecast is more than promising.

Value of the gamification market worldwide in 2016 and 2021

Statista — Value of the gamification market worldwide in 2016 and 2021 (in billion U.S. dollars)

Companies continue to invest in gamification approaches, as they believe them to be genuinely transformational. They use game techniques to:

• Engage customers
• Provide knowledge about specific business domains
• Increase customer loyalty
• Train employees
• Motivate employees
• Improve health and wellness
• Promote personal development
• Manage innovation

Companies using gamification can outpace competitors

Tokara Solutions — Playing for Keeps: CRM Gamification Encourages User Adoption, Increases Lead Conversion, and Speeds Sales Cycles

Gamification for the banking industry: what’s at stake?

There’s a dispute as to whether banks can reap the benefits of gamification just like other enterprises have. We believe they can. Examples of gamification in banking come from various spheres: marketing, sales, talent management, and innovation management.

Furthermore, gamification of corporate banking services is no less successful than gamification of retail banking services. The same goes for traditional and digital banks: intense competition evens the odds. The winners are those who use game design elements and principles carefully and systematically. This is because the size and assets of a bank aren’t the key factors that attract customers and keep their attention. It’s often about joy and rewards: two things people get while playing.

Stereotypes that can put the game to a stop

The biggest challenge faced by banks that apply gamification in their services is customer acceptance and awareness. People may feel cautious about games provided by banks; they don’t want someone to play games with their savings. So banks must carefully decide which elements of the user experience will be gamified and keep data security and account privacy in mind.

The next stereotype that taints the image of gamification in banking suggests that games are only for kids. That’s certainly not true. Games accompany us throughout our lives, from backyard games to high school sports, chess, crossword puzzles, and the Olympics. By the way, social media is also a kind of game played by 2.77 billion people worldwide. Millennials are the favorite target audience of banks, and they’re simply in love with everything digital. The typical representative of this group is a 31-year-old, so they’re not kids anymore.

Practical examples of gamification in the banking industry

Let’s have a look at real-life cases of gamification in the financial sector and the benefits they’ve brought.

Gamification as a useful acquisition strategy in banking

It costs banks a fortune to acquire a desired depositor or a trustworthy borrower. By using gamification in banking, a bank can target customers according to their specific needs. Games appeal to people’s desire for fun, entertainment, simplicity, social interactions, rewards, and competition. Now banks are practicing game mechanics and experience design to motivate people to use credit cards and open deposit accounts.

Here’s an example: Barclaycard US, in partnership with Mastercard, launched Barclays Ring, a social credit card. By applying game design techniques to make card-related activities more engaging, they’ve created a social community of cardholders. The main idea behind the project is “to shape and share in the product’s financial success.” Community members are praised for sharing their suggestions and ideas for credit card features. Online and offline rewards, like badges for switching to paperless billing and charity contributions through Barclaycard’s Giveback program, help to market the product as user-friendly and appeal to active and socially responsible users.

Gamification in banking is a successful method to attract depositors and help them reach their savings goals

Trust is the result of a long course of thoughtful actions. Understanding the financial needs of your audience and helping it reach goals is not as simple as it seems. But introducing gamification in banking to increase deposits is one way to do that. And it’s an especially good way taking into account the proliferation of smart devices, the mass popularity of gaming, and the hobbies of tech-savvy millennials.

Speaking of millennials, this generation is interested in getting rewards for purchases and engaging with brands. On top of that, 40% of millennials say there should be games connected with loyalty programs.

Here’s an example: The Emirates NBD fitness app is one of the finest examples of how to use gamification in banking. To increase deposits, Emirates NBD launched an incentive to motivate people to save more while working out. Customers could open a special fitness account with a mobile app, sync it to a fitness tracker, achieve daily goals like 12,000 steps per day, and get a 2% interest rate as a reward. Now, this is what we call a healthy approach to marketing! The results were tremendous: $4.37 million in savings, increased customer loyalty, and global media recognition.

Gamification for the banking industry means a better service experience, which translates into loyalty among target groups

Loyalty is as hard to win as trust. Gamification in banking to the rescue! When properly designed and implemented, gamification makes banking operations exciting and enjoyable. And that’s where loyalty starts. When users play and win something (say, a higher deposit rate or a home appliance), they project a positive image onto the institution offering the reward. So the next time they need a loan or another type of service, that bank will be the first place they go.

Banks and credit unions can also create immense value for consumers through gamified customer service. Using game principles, it’s easy to help users see how much they can spend, show their spending patterns, and highlight how much they need to save to meet their financial goals. A satisfied customer, especially one that has won something, will boast and tell the success story to their friends and colleagues. Bingo! That’s two in one: an advertisement and a loyal customer.

Here’s an example: BBVA, the leading digital-focused Spanish bank, worked out a unified strategy to drive customer loyalty. As part of this strategy, they launched a BBVA Game — a web app with videos on how to make simple banking transactions, mobile banking app tutorials, and explanations of how to pay taxes online. By completing tasks, customers can earn points and redeem them either to download music and stream movies or to participate in various sweepstakes and giveaways.

Banks that apply gamification in their services can get priceless customer insights

Gamification of retail banking services can open a treasure trove of user information. A game requires actions, and actions leave digital traces. A professional approach to revealing and deciphering those traces lets banks study their customers better. It gives a real picture of the number of active users, their level of interest in banking services, how much money they’re saving, and what goals they’re pursuing. When people are entertained, they tend to be more generous with sharing personal data. Meanwhile, through social media and gamification features, banks can get a distinct identity, which helps in credit scoring.

Here’s an example: The Moven bank encourages users to try their gamified system called CRED. Marketed as a digital friend or colleague, CRED keeps an eye on how users pay bills, shift money, and so on to help with routine financial decisions. Moven, in turn, uses social intelligence as an important factor in forming credit scores.

Gamification of retail banking services can play a significant role in educating and motivating financially underprivileged customers

The importance of financial literacy is recognized in both private and state financial institutions. Governmental and non-governmental organizations invest in financial education programs for all categories of citizens. And for good reason: Consumers who are well-versed in banking matters are a sweet spot for banks and credit unions. They have a realistic approach to their finances, which translates into smart financial moves. This means more saving, rational retirement goals, and higher creditworthiness. Using financial literacy games, banking giants can reach younger consumers, forming desired behavior in the future.

Here’s an example: PayPerks is a web-based financial services company that offers a SaaS platform to improve the financial knowledge and well-being of low- and moderate-income users. They achieve this through a combination of visual education, gamification, and sweepstakes-based rewards.

The bottom line

Gamification in banking is a serious matter to consider. Business titans spend millions on gamification for a reason. They know that it isn’t just about collecting badges or coins; it’s also about precious analytical data, an expanded client base, and an attractive image.

Certainly, there are challenges behind this approach. Banks that strive to apply gamification in their services need to make serious changes in corporate processes, structures, and operations. But to capture the full potential of digitalization in the banking industry, stakeholders have to play the game. And they had better do it the right way.

Originally published at https://www.intellias.com on May 8, 2019.