When searching for new trends in financial software development, bank CTOs might have come across the term 'gamification'. It has already gained a well-deserved popularity in healthcare, education and even manufacturing. However, when it comes to banks, gamification is usually perceived with caution and skepticism. In this article, we'll dispel the doubts by showing the advantages and practical cases of using gamification in the banking industry.
Though the word 'gamification' seems to speak for itself, in reality the concept is not about a mere game development for customers' fun. Rather, it's about applying game principles and mechanics to engage and motivate customers to perform specified activities or change the behavior of a target group.
Gamification appeals to natural human impulses and desires, such as the need for simplicity, fun, entertainment, social interaction, reward and competition. Reaping all these benefits, customers become emotionally attached and, consequently, get engaged with gamified banking solutions.
Taking into account the restrictive nature of the banking industry, some banks find the concept of gamification inappropriate and non-viable. But others have realized that banking shouldn't necessarily be that strict. With this thought in mind, they plunged into discovering the opportunities of applying game mechanics in the banking industry.
1. PNC Bank's Punch the pig game
A US-based PNC Bank with $366.4 billion in assets have long been trying to involve depositors in setting and reaching their savings goals. For this purpose, they created a Virtual Wallet, a hybrid of checking and savings accounts.
With Virtual Wallet, customers can distribute funds between accounts depending on the purpose, be it a regular spending (for example, bill payments), short-term savings or long-term investments. The Wallet's Money Bar feature allows tracking reserved and free to spend funds. To activate the money-saving mindset, the bank introduced a nifty gamified feature called Punch the Pig. When someone is banking online, a piggy bank appears on the screen, allowing customers to transfer a certain sum from their checking to savings account.
2. Extraco Bank's account conversion app
When Extraco Bank with 145,000 customers decided to remove free checking accounts, it introduced an online gamified application to ease the customers' pain. Applying game mechanics, the bank explained the benefits of converting customers' checking accounts to bonus banking. Walking through a series of questions about their spending habits, customers learnt the ways of reducing new fees with online bill pay or direct deposits.
This solution favorably differed from previously used long explanation letters and resulted in a seven times conversion rate growth.
3. Emirates NBD fitness app
To increase the number of deposits, the bank with $122 billion in assets decided to reward customers' active lifestyle with higher savings rates. To achieve these rates, customers had to open a special fitness account with the bank's mobile app, sync the app to compatible fitness devices and achieve daily goals expressed in a number of steps. With 12,000 steps per day, customers could get a 2% interest rate.
Thus, using a gamified fitness app, the bank helped customers to get both physically and financially fit as well as managed to bring $4.37 million in savings.
4. Investorville from CommBank of Australia
The bank with $933 billion in assets introduced the Investorville game to let customers simulate buying and owning a property. Players can experiment with applying for different types of mortgages, go through renovations and gain experience of paying property taxes. While playing, first-time buyers can see the consequences of their financial decisions and analyze potential pitfalls.
5. BBVA game
Another great example comes from BBVA, a Spanish bank with over 66 mln customers. The bank uses BBVA Game to promote its online banking services. BBVA Game is a web application where customers can earn points for watching educational videos on how to make simple banking transactions, use the mobile banking app or pay taxes online. Customers can later redeem their bonus points for music downloads and movie streaming or use them to participate in sweepstakes and giveaways.
Thus, introducing a fun way of learning, the bank managed to improve customer retention through transforming online customer experience.
In case a bank doesn't want to develop its own solution, it can go into partnerships with fintechs that offer gamification-as-a-service. One of them is SAS Games that developed an award-winning game helping children to earn money for college. Once they create a gaming profile and link it to a bank's savings account or a TrustEgg account, they can take on commitments with their family or friends on playing educational games. When they fulfill the arrangements, pledgers receive a notification on their smartphones and can make payments directly to a child's account.
Some banks act the opposite way. They define the problem to be solved and launch the contest that brings the brightest startups. For example, Barclays announced its Launchpad Business Challenge to see how gamification can enhance the online and mobile banking experience for customers. The bank shared sandbox APIs and asked companies to contibute their ideas. With about 16 million customers worldwide, the bank is likely to attract close attention of the most innovative startups.
Summing up, ScienceSoft has prepared the following list of what gamification can do for a bank:
- Boost deposits
- Instill saving habits and foster a money-saving mindset
- Broaden customers' awareness of new products and services
- Simplify the perception of complex banking products
- Gather data insights about current customers
- Increase financial literacy among customers and their kids
Keeping accurate and up-to-date customer profiles in banking CRM is a dream for any marketing and sales manager, since the quality of data in a CRM system directly affects the quality of their work. Nevertheless, maintaining accurate CRM is a challenging task that requires its non-stop revision for duplicate and outdated profiles. Though managers hold numerous meetings and trainings to engage employees into making timely updates, the progress usually doesn't live up to managers' expectations. The reason is simple: CRM cleaning is boring.
Trying to solve the issue, managers can turn to gamification. Indeed, why not bring a bit of fun and competition into the process? A bank can introduce an application that fosters profile cleaning and rewards the best employees with points or badges that can later be redeemed for certain prizes. Seeing other employees' results may add a spirit of competition to the process.
The same concept can be applied to creating gamified apps for customers. In this case, the main idea is to stimulate customers to timely share changes in their personal data, e.g., when they change their phone numbers or addresses.
Why so serious?
When properly designed and implemented, gamification can make banking more exciting and enjoyable, which in its turn will increase customer engagement and loyalty. Banking services, for sure, don't need to be so serious. Being more informal means creating more customer-oriented experiences that improve banks' relationships with customers. Banks can also use gamification to solve their internal issues, such as maintaining an up-to-date CRM system. Gamification doesn't need to be 'the next big thing'. However, it can be a major element that helps to educate and motivate modern digital customers thus influencing their behavior.