Gamification in banking: how wins an audience and maintains its loyalty

Every day people are faced with hundreds of dialogs, messages, graphs, numbers, and other data that can completely derail their work attitude and ability to systematize the information they receive. The desire for simplicity and the desire to be accessible have led business giants to understand the need to introduce a logical and understandable form of interaction into business processes – the game. Against this backdrop, gamification in banking is gaining popularity.

The potential of game mechanics was noted back in 1982 by Thomas W. Malone, the American theorist, who suggested that video games of that time could serve as inspiration for optimizing the work of other industries. But one of the most effective examples at the time came from board games – for example, the restaurant chain McDonald’s armed itself with the mechanics of “Monopoly,” launching in 1987 a kind of game-lottery McDonald’s Monopoly; in which consumers encouraged to find stickers on the packaging of food that could be exchanged for prizes.

In the early 2000s, websites adapted some of the game elements, allowing the user to interact with interface elements for fun. Also, In the 2010s Gamification gathered a lot of “hype” – experts predicted a great future for this new approach and noted that the popularity of using game elements in business will grow significantly. 

Game designer Jesse Shell even said that games would be everywhere, “from toothbrushes to tax returns. An important impetus for developing a new approach given by the era of the smartphone, which in the first half of the 2010s gave rise to a flowering of all kinds of applications that in one way or another use game mechanics. And in the second half of the decade, game mechanics are already penetrating everywhere from sports to banking applications.

The basis 

Gamification in banking, as in any other sphere, is based on basic principles derived directly from game mechanics. These principles include challenge factors, persistence, clear goals, feedback, the experience of defeat, motivation, encouragement, and learning. In other words, gamification is as transparent as possible; and allows you to achieve concrete results by following the rules and being proactive; which is exactly what the customer and the bank need from each other.

In banking, this tool allows:

• change the client’s motivation, reorient it from a short-term perspective to longer and more capacious formats of interaction;
• to form close contact between the bank, its clients, and employees;
• to attract new audiences to the existing banking products (due to the convenience, simplicity, and inclusiveness), and in an unobtrusive manner to introduce users to new solutions, demonstrating their effectiveness;
• maintain the existing customer base through the actual infinity of financial “game” and encouragement of activity in it;
• make routine operations (transfers, bill payments) easier and add an element of entertainment to them;
• get feedback and track interest in a product or function;
• stimulate competition between users and help them introduce children to banking products;
• collect information about customer preferences, and make personalized offers.

Gamification is for:

Gamification is especially attractive in the context of the Millennial generation (people born between 1981 and 1996) and the Zoomer generation (the youngest generation, its representatives, were born in the new millennium). Millennials are beginning to take on the role of the leading consumer. As a rule, these citizens with highly specialized knowledge, not ready to spend a lot of time getting used to and learning to use the “old” tools – both communications and interaction with the business or other people.

Zoomers have never known the “non-digital” world at all; so they are even more engaged with technology; and the experience of social contact via the Internet has been familiar to them since their early childhood. According to the business magazine Fast Company, in the U.S.; zoomers already make up 40% of the entire mass of buyers. Increased activity in social networks and the absence of division of the world into real and Internet characterize this generation. 

What and how to gamify

First, it is an effective way to deliver new information. In this context, the case of American Extraco Bank is indicative. A financial institution has developed a browser-based quiz game to inform users about its new services. People answered questions of the virtual assistant, which offered advice on how to spend less and earn more. At the end of the program, it was found that the “game” could motivate 14% of users to start using online banking (instead of 2% as before).

The market also offers financial and educational solutions: for example, the Flourish Savings, Smart typing, or PandaMoney savings applications. The latter, for example, offers users to set a goal; and specify the amount and the date by which its to achieved. The app calculates the payment to made each day, but, unlike standard piggy banks; it carries out the process in a game – feeding the panda. A kind of analog of “Tamagotchi” allows you to save money (the amount is transferred to the customer’s account), but does so without explicit notifications in the vein of “make a payment”. 

Another example BBVA, a Spanish bank that also turned to the game format by introducing the BBVA Game, an app with video tutorials. This is not a YouTube counterpart, but a full-fledged game guide to the world of new services. For example, the videos explained how to make payments and transfers online; and users were encouraged to perform tasks, which; when completed, allowed them to download music, and movies or receive tickets to soccer matches.

Gamification in banking wisely

For all its universality and usefulness, the tool does not exclude human errors in implementing this approach. Yes, they stem from direct neglect of the key principles outlined above, but it’s still worth dwelling on them in more detail.

First, there is a disregard for the user’s interests and motivation. Whatever scenario devised, even if it’s a full-fledged game; the user must clearly understand why they should try something new. Gamification, like any other way of interacting with an audience, is not good by itself; but only when “at the start” the user has no question “why?” 

Second, the lack of clear business goals. The tool is often not taken seriously, so success metrics are not defined in its implementation. For it to become a business tool, it is necessary to determine in advance what results in sales, savings, or costs we are striving for.

Sloppy design and execution. The above also works in the opposite direction – the product must be pleasant and convenient; few people will sacrifice their own nerves, even for a perfectly acceptable offer and benefits.

Complexity is also one of the reasons “game” solutions fail. It undermines the whole basis: if you have to read two sheets of text to understand how the product works; the chance of success is minimal.

Conclusion:

Not to be confused with badging. The former is just one of the tools, which should used wisely and with attention to other elements; The “plushie” from badging risks remaining so, not involving the user and giving them no moral feedback.

The lack of a progressive reward scale can also alienate an already loyal audience. You can’t reward equally for every new step along the way; or the user will lose interest and turn to more competitive solutions.

Last, but most important, gamification cannot be forced. To engage a person, it is enough to give them opportunity and choice – only then will the payoff be positive.