Customer experience is the cornerstone of success in a modern market. As digital transformation is gaining momentum, banks are looking for new ways to satisfy their clientele. Gamification in digital banking is a fun – and strongly effective – way to enhance offered services. It brings a sense of challenge and friendly competition into the routine fund management tasks. But that’s not all: gamified finance apps break records in customer acquisition.
The gamification market is on the rise and enjoying rapid growth. Its size is expected to reach $32B by 2025, boasting the CAGR of 27.4%. The fields with an expected gamification boom are IT, banking, and the public sector. As for user acquisition, gamification solutions can potentially increase it by a whopping 600%.
Let’s explore gamification, its principles, techniques, and benefits in more detail.
What is gamification in business?
First off, let’s clear up the term. Business-related gamification denotes the use of game elements and mechanics for various purposes. It is most commonly utilized to achieve the following goals:
- improve customer interaction,
- increase client or employee engagement, and
- facilitate the overall business performance.
Drawing on behavioral science techniques, gamification shapes the desired psychological and behavioral outcomes in users. Today it is widely used for creating a satisfying and immersive client experience.
The core in-app gamification principles involve the following:
- Engaging and encouraging. Gamification is all about challenges, may it be education, professional growth, or customer involvement. Each completed task or fulfilled aim is rewarded with a certain incentive. This pattern appeals to the desire for achievement that is firmly imprinted into the human psyche.
- Eliminating boredom. What really sets gamification apart from other motivational techniques is a sense of fun. Just like in real games, participants can achieve various goals in an engaging way. This, in turn, makes regular tasks much more enjoyable, driving participation and retention.
- Rewarding positive behaviors. Professional skills or customer habits, gamification solutions are all about promoting what is right. They motivate to learn, acquire new skills, and improve one’s habits (spending patterns, saving up, etc.). After all, social rewards and rankings are an important part of today’s corporate culture.
Is gamification really popular in modern business? It has been adopted by more than 70% of companies that are on the Global 2000 list. Sales, E-commerce, banking, finance – these are only a few of the industries following the trend.
The banking industry is actively implementing gamified features in digital platforms, applications, and loyalty programs. A typical example is giving points as a reward for completing tasks or transactions.
Other instances include setting and achieving one’s savings goals, taking up financial challenges and leaderboard competitions. Ultimately, such gamification ideas in banking result in higher client involvement and retention rates.
Now, let’s take a closer look at the practical use of gamification in the field.
Gamification techniques in banking
Fund management and transactions don’t have to be mundane or boring. If they are, a banking institution is at serious risk of losing clients.
To retain and expand the clientele, modern banks can use the following gaming strategies and techniques:
Points and badges
This may sound simple, but simplicity is genius in certain cases, including this one. Points are a clear and intuitive way to measure and reward user’s progress. They serve as a form of virtual currency that can be exchanged for exclusive offers, free services, certificates, etc. Completing tasks, reaching milestones, or leveling-up becomes more meaningful with such an incentive.
As for badges in financial gamification, they help represent user’s accomplishments visually. Who wouldn’t like to showcase their achievements and get the deserved recognition? Instead of switching to competitors, the customers will be happy to stay – and strive for more.
Both points and badges appeal to the extrinsic motivation that is stimulated by external rewards. They help establish a clear feedback system and foster positive behaviors.
Levels and leaderboards
Just like the techniques described above, these two create a sense of accomplishment when using banking services. To brighten up the routine tasks, banks can establish a certain gamified progression. Financial challenges and quests for users will result in level-ups and unlocking various perks. This will foster loyal and returning customers that are more invested in the digital banking provider.
Now to the leaderboards, which function as a social engagement tool. Similar to badges, they are used to visually represent users’ progress and ranks (collected points, completed education modules, efficient investments, and more).
Leaderboards are an excellent motivator for friendly competition, fostering a positive and engaging social environment. They allow banking app users to compare their achievements to others – and push themselves further.
The one condition to implementing leaderboards is balancing the ranks. It is important to avoid discouraging the users who rank lower, which creates negative dynamics. Every customer should feel encouraged and strive for more instead of feeling left behind.
Virtual characters
A great solution for gamification in finance and banking, such characters help create a more personalized interaction. They can be implemented as animated avatars, virtual assistants, or chatbots.
The primary purpose of these characters is to guide users through various processes. Account setup, transaction management, and financial applications are some of the areas that can benefit from this trend.
Another useful feature of such assistants is personal recommendations. Many banking app users would welcome financial advice based on their transaction history, milestones, and preferences. A virtual assistant can help overcome negative spending habits and decrease monthly fees. What’s more, self-service will become easier with the 24/7 friendly support.
It’s no secret that people prefer interacting with humanized technology. Modern-day chatbots, robot assistants, and animated virtual characters definitely count as such. Digital banking providers have much to gain from using the said characters to boost user engagement.
Banking tutorials
Tax management, transactions, and other aspects of online banking can be somewhat challenging to users. Here’s where gamification of financial services can come into play and make a real difference. Instead of rolling out lengthy articles, banks can create interactive tutorials that actively reward customers. The stack may include learning modules, quizzes, simulations, video guides, and such.
Gameplay is also a powerful tool for increasing awareness about the upcoming services. Conventional advertising is all fine, but why not make it more interactive and user-centric? A short presentation with a virtual assistant showing how things work could serve as an example. Alternatively, banking app users could try a new feature as a challenge, earning points or other rewards.
Overall, implementing gamification strategies in banking tutorials increases client involvement and knowledge retention. Instead of burying the user under a ton of information, it makes learning fast – and fun.
Benefits of gamification in banking
As disclosed above, gamification can do wonders for modern banking. Namely, it can transform the boring routine of fund management, making it more appealing and efficient.
Let’s sum up the top benefits of gamification for the banking sector:
Increased customer engagement
The users of banking apps tend to stay on them for a longer period with gamification. They are also more eager to interact with the provided services. Swapping the provider in search of a more user-centric solution is much less likely in this instance.
Gamification in finance not only makes the routine actions extra engaging, it also gives the clients a real incentive to stay loyal to their bank of choice. A well-thought-out points or reward system makes for returning customers with a high level of investment. In fact, gamifying an engagement strategy can result in a 22% brand loyalty increase.
New client acquisition
Gamification for apps can stimulate positive word-of-mouth regarding the bank. Existing clients enjoying the interactive nature of their experience are more likely to recommend the service. As a result, banks can gain further clients without inflating marketing expenses.
Looking at the retail industry, gamification has contributed to an impressive 700% increase in customer acquisitions. Naturally, nothing stops financial institutions from “leveling up” their own by applying gamification in banking services. The bored clientele of old-school competitors may already be searching for an alternative.
Financial education
Gamified banking tutorials are the future of financial literacy. Just a few glances at an investment encyclopedia will show how complex things might be. Making money work – even managing one’s funds – is not exactly a walk in the park. Here’s where the gamified tutorials and courses can make a real difference.
According to the stats, learners can remember up to 90% of information from a gamified task. This is a huge achievement compared to the 10% for reading and 20% for hearing. Consequently, digital banking education gets much more effective without the traumatic “back to school” experience for customers.
New service promotion
Gamification in the banking industry excels at spreading the word about new features and services. Why so? Unlike banners and pop-ups, which users can routinely dismiss, it makes the discovery process interactive. Presentations with virtual characters – or an offer to try a feature as a challenge – come with more appeal.
Some more stats: gamification of a free trial solution marked the increase in its usage by 54%. Moreover, it boosted the buy clicks by 15%. This alone showcases the importance of such techniques in raising customer awareness and driving profit.
Customer data collection
Interactive engagement is a valuable source of client-related data. Implementing gamification in banking will give a lot of insights into the customer behavior and preferences. In simple words, the banking service will know what clicks – or doesn’t click – with the clientele.
The next step will be thoroughly analyzing the collected data and putting it to good use. Brainstorming sessions and business improvement planning can gain a lot from this type of information. No more bothering the clients with endless questionnaires and polls – it’s already there.
Best examples of gamification in banking services
Gamification has a long history of successful implementations in the industry. Let’s go over a few of the best gamification examples in banking:
CRED by Moven (USA)
Looking to assist customers with routine financial tasks, the Moven bank designed a gamified system. The equivalent of an online friend or colleague, this unique engagement tool served as an interactive financial score. The better the users were at saving and managing their funds, the higher the score. Customer social data was “exchanged” for assistance with financial decisions.
What made this gamification solution so effective? The financial behavior of clients served as a basis for tailored recommendations. Payments, transactions, money transfers, etc., shaped the unique offers from the bank. Furthermore, they helped disclose the clients’ strengths and weaknesses in fund management.
BBVA Game by BBVA (Spain)
This bank decided to gamify the financial literacy program with some creative techniques. Firstly, they produced videos to show clients how their online services worked. Secondly, their digital banking was reimagined as a “game” where players won points for transactions.
The bank went even further, creating an entire virtual economy around the points system. The rewards for customers came in the form of digital downloads and football tickets. As a result, BBVA’s client engagement reached new levels.
More than 100,000 participants joined the program during the initial 6 months. BBVA won the 2013 Bank Innovation award for this example of gamification in banking services.
Banking challenges by Monobank (Ukraine)
This famous all-virtual bank did more than simply creating a cute cat mascot for the app. It took on the boring and repetitive tasks (depositing, account setup, etc.) – and made them fun.
The bank unlocked an opportunity to earn funny mascot-based achievement badges for completing various tasks. The latter included spending money on specific categories, performing transactions abroad, and bill splitting with friends.
Due to this clever tactic, Monobank boosted its ratio of daily active app users. Gamification techniques also brought on a huge improvement in client retention rate. As of June 2023, the bank ranked #3 on the top finance app chart in Ukraine.
Gamified onboarding by Revolut (EU)
First-day retention figures for apps might be downright discouraging. However, Revolut came up with inspiring signup/onboarding techniques that were gamified. The registration video borrowed from the top popular Instagram stories, even having a progress bar. Obviously, this made the entire signup flow look less tiresome and more streamlined.
Another gamification in banking example from Revolut was university leaderboards for increasing students’ involvement. Revolut University Race was designed as an incentive to finish onboarding and enter the contest. Winners would be awarded with a free premium, which would support their loyalty.
Gamification and strong engagement programs at Revolut were certainly productive. The service reached the landmark of 20M annual registered users in 2022.
Gamifying banking: Implementation guidelines
Banking sector is highly competitive, so focusing on user engagement and retention is never a wrong move. Gamification techniques described above help retain existing clients and draw in new ones, ultimately boosting profit.
However, banks must choose wisely as to which user experience components should be gamified. User privacy and data security should also be remembered for gamification in banking apps.
What are the guidelines one should follow during the financial app development process?
The basic outline for gamified solutions is provided below:
- Define objectives. Do you strive to boost client engagement? Foster specific behaviors in users? Improve your clients’ financial literacy? Each of these goals would require a specific design and implementation strategy. Remember not to overuse gamification techniques: there’s a measure to everything, including fun in banking.
- Research your audience. Successful gamification solutions are always centered on users’ needs and preferences. It is important not to copy what’s already in the market, but make a truly tailored product. This way, your gamified solution will resonate with customers and help with their pain points.
- Work out the design. Think carefully which features will be included in your solution. Each and every element must be aligned with your general business strategy and its goals. Your gamified finance app must be worth its value, giving you a head start in the market.
- Account for the risks. Gamification for apps comes with a few risks, which you should be aware of. Users could try to exploit the system – or get addicted to the game that’s too immersive. Moreover, user privacy and personal data protection must always remain the top priority.
- Implement the solution technically. Make sure that your gamification approach aligns with all technical requirements. Such factors as scalability, customization/integration options, and security features are important in the banking application development.
- Analyze received data. Don’t let your gamified banking app become stale. Use the collected data to further enhance client experience and shape new approaches. Ultimately, this strategy will allow you to offer even more tailored services to your clientele. This, in turn, will strengthen brand loyalty and motivate returning customers.
In conclusion
Gamification strategies in banking are the present – and the future – of customer attraction, engagement, and retention; points and badges, leaderboards and contests, virtual characters and tutorials are only some of the available techniques.
Interactive game-like elements transform routine financial tasks into appealing quests with real rewards. As a result, customers are less likely to search for more user-centric solutions by direct competitors.
Gamification in digital banking brings on the following core benefits:
- boosted client engagement,
- new customer acquisition,
- increased financial literacy,
- promotion of new services, and
- customer data collection.
Thinking of gamifying your digital banking app? Our team of experts are ready to step in – and take your business to a whole new level. Contact us today to win the market race of tomorrow.
Frequently Asked Questions
What is gamified finance?
Gamified finance is the usage of game mechanics and components in the financial sector (challenges, rewards, interactive features, and more).
What are the benefits of gamification in banking?
The core advantages of gamification in banking:
- improved client involvement and further client acquisition,
- greater financial literacy,
- alternate promotion of new features or services, and
- collection of valuable user information for future updates.
What is an example of gamification in finance?
Gamification techniques in the financial industry:
- points,
- levels,
- leaderboards,
- virtual characters,
- interactive tutorials, etc.
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About the author:
Alexey Shalimov, CEO at Eastern Peak
As CEO at Eastern Peak, a professional software consulting and development company, Alexey ensures top quality and cost-effective services to clients from all over the world. Alexey is also a founder and technology evangelist at several technology companies. Previously, as a CEO of the Gett (GetTaxi) technology company, Alexey was in charge of developing the revolutionary Gett service from ground up and deploying the operation across the globe from New York to London and Tel Aviv.
