As we witness a multitude of changes and innovation in the service industry, gamification is considered a serious business. The shift towards digitization is gaining fast momentum. Industry experts believe that gamification is of paramount importance across the service industry as it helps organizations to engage new clients, re-engage existing ones and eventually increase market penetration and revenues.
Before we deep-dive into understanding the role of gamification in the financial services, let us understand gamification in its core form, the typical tenets of gamification and how it amplifies business growth.
Gamification: The use of any tool/technique/application which leverages gaming elements (not necessarily the game) to encourage the participation of the audience and influence the decision of target users. The element of the game, which is the core of gamification, is the “Fun” part of the game. The core driver of gamification is the “why” and “How” which motivate and influence user behaviour. The prime objectives of gamification are:
- Influence the behaviour of user
- Increase in user engagement
One of the most effective examples of gamification could be from the US schooling system. To encourage the reading habit (behaviour) in primary school, students are given access to their secured portal to answer the questions based on books selected by them. If they complete reading 12 books from the library in any academic quarter and score more than 90% correct answers, they are rewarded Pizza or Tacos coupons. This has significantly boosted students’ participation in reading and produced quality work. That is the underlying objective of this gamification theory.
Another example is from Domino’s Pizza: They have created an application called “Pizza App” which lets customer create their own pizza and order the same through the app itself, thereby increasing US sales revenue by 30%.
Now let us look at more examples from financial services (banking and investments). Following are the typical tenets of any gamification tool used in financial service industry. One or more tenets could be applicable from a gamification tool:
- Engaging new and re-engaging existing clients: In a highly competitive financial market, present day organizations strive to attract new clients and at the same time retain the existing ones. Gamification helps attract new clients via public sites and consequently re-engage the existing clients to keep the interaction active.Financial advice is one area which faces multiple challenges to re-engage the clients after they receive advice and acquire the products. Presently, firms have started focusing on gamification via. goal based Investment, enabling clients to keep track of their objectives as well as assist firms in engaging their customers through various alternatives based on their investment performance. Another example: Tool for calculating financial score based on investment or assets held by the client and eventually suggest various options for further investment based on their specific goals.
- Call for Action: Some of the gamification tools are developed with the final objective of leading the client to acquire the offering. Example: Investment Simulation tool. Based on various input parameter i.e., risk appetite, duration, initial investment amount, the tool provides the returns based on various statistical tool like Monte-Carlo simulation. Users explore different combinations and connect to the advisor/robo advisor by just a click from the tool.
- Branding: At times gamification tools are built to create brand awareness.
- Education/awareness of offerings: Gamification can help create awareness of offerings for the targeted audience and can be used only for developing knowledge base of the client for informed decision making in self service offerings. This plays a critical role in financial literacy among mass client base.E*Trade provides product and financial knowledge and is considered the first step for many clients to get engaged with financial firms.
- Lead Generation: While the gamification can be used for above mentioned objectives, this can also be used for lead generation for advisors/marketing team to approach the prospective buyer of the offerings within existing or new clients. There are various tools (I.E. Adobe- SiteCatalyst) which can track clients. Moreover, the gamification tools can be leveraged for further follow-up by the marketing team and financial advisors. Prospective clients can be tracked by asking their email/phone number before they can use gamification tool on public sites.
- Recognition: While gamification is expected to enhance interaction and engagement, this is only possible through recognising clients via Badges, Progress tracker, Bonus points.
The positive outcome of gamification is more common and evident in air/bus ticket booking sites as well as travel cards. It is now catching up in the financial Industry. Banking system is much ahead in implementing gamification compared to Investments. Financial advice and wealth management hold enormous potential which have shown a certain degree of innovation in the recent past.
To achieve new gamification ideas for engaging clients, some banks have even run contests for companies to come up with innovative ideas for gamification for their business. For example, Axis bank hackathon and Barclays Launchpad competition were conducted in 2015 and 2016, respectively. Barlays has 16 Million customers with 5 Million using Mobile app. So it makes sense to provide more means to engage clients via various gamification tools.
With the growing market of gamification in financial service industry, there are many innovative business models currently being implemented. Gamification as a service (GaaS) is relevant in the present market. Multiple tech firms have built gamified solutions and enabled banks to efficiently deploy into their online channels through APIs. Some of the providers for GaaS are SmartyPig, SaveUp, AchieveMint, GameEffective, and Mindspace.