I was at a Mobile event recently when the topic of gamification in banking came up. It’s a term that has come to polarise so many opinions. I happened to be on the panel when a member of the audience asked for our thoughts. One of the panel ‘experts’ proceeded to talk and they had absolutely no idea… He touched on using his Xbox to bank and he even mentioned Monopoly in there. In case you have lived under a rock for the last 12 months, gamification is the use of game techniques such as challenges, rewards and rankings to influence desired user behaviour. It’s digital equivalent of dangling a carrot on a stick…
Even though the term is relatively new, gamification has actually existed since the dawn of civilisation. Our economy, culture and sports are all driven by the desire to win, beat, and compete. Over the last three decades we have applied these themes to the act of video gaming. We don’t play video games because of the quirky characters. Even though an Italian plumber in blue overalls and a bad accent has a certain appeal - it is not our main motivator. We play video games because of the trials and tribulations. We love a good challenge and a happy ending. The harder and more complex the game is the more we strive to clock it.
In a banking context, gamification understanding and its application is at its very infancy. The ‘suits’ are finally getting their heads around mobile and social let alone gamification. This will change soon enough. So what does gamification offer to the industry? Banking, in itself, is something that no person wants to do. It’s tedious and for most people quite stressful. For most, it results in them having to shift around the little money they have. It’s the reason Personal Financial Management (PFM) hasn’t really taken off. No one really wants to work to understand their financial situation in more detail. This is the very reason why gamification is perfect for banking.
If done correctly gamification is a great way for banks to make banking a little bit more enticing. It can be used to encourage people to adopt a service or to influence how those services are used. Banks can take advantage of their customer’s psychological predisposition to engage in challenges to change the status quo. It can be used to drive, encourage or promote end user behaviours that either benefit the user themselves, or achieve strategic business objectives. Through the application of appropriate persuasive design principles banks can actually help customers make a difference. Gamification can be a key component of the future of banking.
Banks need to move away from offering tools that allow customers to manage their money, and instead offer capabilities that help customers maximise their money. Manage to maximise. A slightly different word and a brave new world. At the moment most banking services are relatively dumb. They don’t really do anything for you. Unless you are in trouble, or the bank wants to sell you something, you never really hear from them. They don’t help you save or spend appropriately. They give you some (average) tools so you can manage it yourself. It’s like going to a restaurant that allows you to use their kitchen to cook dinner for yourself.
Gamification is a great opportunity to make banking more engaging, by encouraging users to engage in desired behaviours, recognising achievements, and by helping to solve problems. Through this banks can begin to engage with customers at a different level. Beyond servicing customer needs it can deliver a lot of benefits to the bank. It can influence cost reduction by rewarding customers for using low cost channels. It can reward customers who adopt mobile payments and stop withdrawing cash. It can also encourage customer acquisition. Referral is a great way to deliver new customers by rewarding your existing base for registering their friends. Gamification should be applied throughout all elements of the service proposition from the underlying product configuration to the marketing strategy.
For banks who don’t know where to begin there are a few good examples already out there. The Smarty Pig concept has been around for a number of years. It encourages users to reach savings goals through rewards and then socialise them with their peers. SaveUp.com is a new financial website that rewards customers with credits for big money prize draws based on their online activity. It really is only beginning though and there will be plenty of activity over the next 24 months. For most start-ups and new entrants gamification is a core feature of their service because it can create the loyal usage and virality that will drive success. Banks need to think similar and act as if they don’t have a base. The build it and they will come mentality isn’t sustainable.
The final question is, are they game enough?