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Could more banks look to use gamification?

Theo Osborn | 17:00 Wednesday 5th December 2018

Gamification is defined as the application of typical elements of game playing to other areas of activity, typically as an online marketing technique to encourage engagement with a product or service.

These game-playing elements can be applied to many sectors, including banking.

In 2011, research and advisory company Gartner predicted that more than 50% of organisations that manage innovation processes would gamify such processes by 2015.

It also claimed that more than 70% of Forbes Global 2000 organisations – which ranks the world’s largest public companies – would have at least one gamified application.

Despite these predictions, the global gamification market was valued at just $2.17bn in 2017, according to market intelligence and advisory firm Mordor Intelligence.

However, it expects the market to reach $19.39bn by 2023.

Specialist Banking spoke to industry experts to see whether they felt there would be a rise in the use of gamification in the banking sector in the future.

 

Could more specialist banks use gamification in the future?

“There will almost certainly be a rise in gamification in the future,” said Daniel Meere, UK managing director at Axis Corporate.

“These are positive ways of encouraging customers to make good choices which often also benefit the provider, thereby creating a win-win situation.

“Gamification makes the process more intuitive and fun, while helping you, as the user, feel comfortable that you are using it in the right way.”

Caterina Ponsicchi, product manager at Creditinfo, believed that gamification had become more than just a buzzword.

“With more and more companies turning to game dynamics in [the hope] of taking their customer and employee engagement to the next level, gamification methods will most likely be on the rise in the foreseeable future.

“The sheer popularity of gaming is a testament to its power to captivate and engage audiences across the world.

“While gamification in financial services may never get as far as that, the adoption of such methods could have a significant effect for greater engagement and positive change for the industry.”

Igor Kaufman, delivery manager, AI program lead at global technology consultancy DataArt, added: “People that were born in 2000 are 18 this year, they start working on their credit score now.

“All their conscious life, they used gamified products.

“Everything is going digital and there is no digital world without gamification for them, and not only for them.

“In 10-15 years, they will be the most active users of banking products, so the products should adapt.”

Kerim Derhalli, CEO at Invstr, stated that both financial markets and investing were naturally well suited to gamification.

“Particularly when it comes to financial education, people learn more effectively when they are having fun and learn most when they are having fun with others.

“We’ve seen that gamification systems that reward progression and provide a more social experience stand the best chance of breaking down the typical barriers that discourage people from engaging with finance and investing.

“There’s no reason why these principles can’t be adopted in broader financial services and financial education.”

Matt Ford, product and marketing director at Tandem, believed that any developments in the banking industry that resulted in people being more engaged with their money was a good thing.

“If gamification is changing attitudes, long may it continue.”

 

Can gamification methods make a difference in banking?

“Gamification is more than just making banking fun,” added Matt.

“It’s really about motivating customers to engage with their banking products through game principles.

“With fintech in general there is a real opportunity to change the behaviour of your customers.

“We use nudge theory and behavioural economics to help ensure users feel good about the progress they’re making, are nudged to make more informed decisions and remain liberated from the stress of managing their finances.”

Caterina claimed that some banks had started to see gamification as the future of online banking because it could help to transform traditional activities into more interesting, exciting and enjoyable ones.

“Financial inclusion is about giving everyone access to the services they require and, ultimately, giving people the opportunity to lead a better life; a chance to climb out of poverty and into a society that is fair and creates ‘wealth’ in its many shapes and forms.

“Gamification methods offer the banking industry the chance to reach out to a broader audience and encourage user engagement.”

Could we see more health-related gamification products in the future?

Monobank is an example of a company which has incorporated gamification in different ways, including through its sports deposit account, which offers customers a higher interest rate for walking 10,000 steps a day.

Oleg Gorokhovskyi, co-founder of Monobank, said: “The deposit portfolio of this product is not that big (less than 10%), but in terms of news and public reaction, it’s been a big hit for us.”

Daniel explained that the next step in banking was likely to be a ‘linear’ tie-up whereby good behaviour was rewarded by financial service providers.

“This would see customers gaining access to better interest rates on savings products once they hit a savings goal, or discount on purchases that they had identified as planning to buy through a regular savings plan.

“Further ahead we could see new homebuyers being eligible for better mortgage rates once all repayments are met in the first year or lenders tapering down interest rates on unsecured loans when borrowers can demonstrate that they are paying back an agreed amount each month.”

Igor concluded that it was not only interest rates that could be a focus for gamification.

“If a user is highly active when it comes to fitness, the cashback for sports goods may be higher and this increases customer loyalty.

“The cities with parking issues or air quality problems may sponsor programmes like: ‘OK, so you bought a new car? If you take 10,000 steps per day instead of driving, you get a lower credit rate for the car’, or something along those lines.

“I think there could be a lot of gamification ideas out there, specifically at the intersection of banking and related areas of life.”

 

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