The Power of Gamification to Drive User Engagement in Finance

As human beings, we have an innate affinity for games. From childhood play on playgrounds to virtual adventures on screens, gaming is a part of who we are. Today, this intrinsic love for gaming is finding new expression through the rising phenomenon of “gamification” across various apps and platforms.

The fintech sector thrives on innovation and a relentless drive to challenge norms. With groundbreaking trends like Embedded Finance, Open Banking Ecosystems and Decentralized Finance (DeFi), which are shaping the industry's future and inspiring companies to adapt and innovate to meet evolving client demands, could gamification emerge as the next major trend in fintech's ongoing evolution?

Gamification in financial services has gained significant traction in recent years due to its ability to engage users, promote financial literacy, and drive desired behaviors. By incorporating game elements into traditionally non-game contexts, such as banking and investing, financial institutions can create more interactive and enjoyable experiences for their customers. Here are some key points to consider about gamification in financial services and the technologies that can be used to achieve the best results.

Understanding Gamification

Gamification involves the application of game design principles, mechanics, and psychology to non-game contexts to motivate and engage users. It’s not merely about turning banking tasks into games; gamification is about engaging customers actively by applying game-based thinking. It’s about leveraging psychological principles to incentivize and reward desired behaviors. 

Figure 1. Preferred gamification strategies when it comes to adult learning

In Financial services, elements such as points, badges, leaderboards, challenges, and rewards are strategically employed to motivate users to save more, invest wisely, and achieve their financial goals. The banking sector in particular can benefit from gamification features to improve the customer experience, increase their interest and loyalty, and to reduce emotional barriers to financial matters by transporting content in a playful and tangible form. Displacing the inherent seriousness and abstractness of ‘finance’ with humanizing gaming constructs is an ideal method by which to recapture the customer narrative in banking and financial services.

Objectives of Gamification

Financial institutions deploy gamification with multifaceted objectives. They aim to boost customer engagement, foster financial literacy, promote responsible financial behaviors, and ultimately, cultivate long-lasting customer loyalty. Through gamified experiences, users are empowered to take control of their finances, make informed decisions, as they progress towards financial well-being with deeper engagement and ownership to their decisions all along the journey.

Gamification adds an element of fun and entertainment to otherwise famously mundane financial tasks, transforming these activities into engaging, even enjoyable game scenarios that educate and reward the participants. According to Deloitte, this form of gamification seeks three main objectives:

1. Convey a message, whether educational, marketing or a blend of the two.
2. Improve the learning path for users.
3. Offer training or simulation within a virtual environment that mirrors potential real-life situations.

Many companies utilize game mechanics to reward positive behavior and educate players. Gamification also provides other advantages, including the capturing of data, which can be used to promote new products and services, and to enhance customer satisfaction, and therefore brand prestige. Finally, effective gamification can directly lower customer service costs while achieving significantly increased levels of genuine customer satisfaction, and customer success financially. These are crucial metrics for every financial services organization.

Gamification Mechanics & Examples

Tadhg Kelly referred in TechCrunch to his efforts to dispel “...the perpetual vagueness surrounding the gamification scene, such as the slippery nature of “game mechanics”. As far as I can tell, the mysteries of mechanics are the reason why gamification seems like voodoo. And it shouldn’t be.” He argues that Game designers tend to use “Game Mechanics” as a catch-all term and thereby entirely loses its actual meaning. In this regard, his comments are a reminder of another ultra-hyped tech category of today: “AI”. At tech-Azur, we are driving to higher expectations and resist falling into this all too common trap of false-labeling.

Instead, we recognize that rewards, like achievements and badges, collective interactions, as well as customer behavior analysis, must be correctly understood to be only part of gamified experience, not its mechanics. Real “Game Mechanics” have the power to transform a boring financial services journey into a series of interactive challenges and milestones, akin to levels in a video game. For example, instead of facing a daunting labyrinth of confusing steps, customers and financial professionals are presented with clear objectives and rewards for completing each stage of the process. 

Let’s explore how gamification mechanics can be effectively applied to the financial services environment:

1. User Feedback Mechanism

Imagine receiving a notification from your mobile banking app asking to vote on topics you’d be interested in learning more about, like "Understanding Credit Scores" as an example. The winning topic would then be presented through interactive modules, quizzes, and personalized content, enhancing financial literacy while engaging users in a fun and interactive manner.

This mechanism enables real-time feedback gathering to enhance user experience and tailor banking services to user preferences, facilitating user feedback to improve tool functionalities and better meet their needs.

2. Expert Insights Hub

Financial services platforms can implement a "follow" mechanic similar to social media, where users can follow financial experts, successful investors, market analysts, influencers, or friends within an app or platform.

This creates a collaborative environment where users can share insights and ideas, track activities of those they follow, gaining inspiration for their own financial management, while it also promotes financial awareness and responsible spending habits.

3. Rewards Program

Loyalty or reward points is a way to motivate users to engage with the tool regularly, and take proactive steps towards financial growth and education. In a banking app, users can earn points or "coins" for transactions, which then would be redeemed as a cashback or discounts on financial products, or even donations to charity. Investment platforms can offer rewarding points for users who engage with the platform regularly for making investments, diversifying portfolios, or attending financial education webinars.

Another good example is how airlines allow you to earn miles and gain XP on flights, and then spend them not only for a flight ticket or a class upgrade, but also for extra baggage allowance, more comfortable seats, business lounge access, Wi-Fi, etc.

4. “Escape” a Financial Activity

There is something unique and engaging about finding clues and solving puzzles, and it can encourage users to adopt positive financial habits and achieve financial goals through interactive challenges. At the same time, it makes budgeting and saving more engaging and rewarding, fostering a sense of achievement and motivating users to take control of their finances. 

By leveraging technology, these apps provide actionable insights and recommendations for improved financial behaviors: AI-driven algorithms are able to personalize goal setting and progress tracking, motivating users to achieve results through gamified experiences. 

5. Winning the Powerball Jackpot

Financial institutions can make saving an exciting opportunity for users to win cash prizes or rewards. Unlike traditional saving methods, this approach engages users on a deeper level, turning saving into a thrilling endeavor rather than a mundane task. Instead of viewing saving as a chore, users are motivated by the prospect of winning prizes, making the saving journey more enjoyable and fulfilling. 

6. Financial Health Score

Some fintech apps leverage a "grades" mechanic to encourage responsible financial behaviors and track progress. We are all familiar with a government issued “Credit Score” – when considered as a grade, the Credit Score could be used as a source of motivation to improve users’ financial behaviors, leading to potential access to improved financial products and services.

Investment platforms can offer users personalized feedback on their investment strategies and risk tolerance, guiding them towards more informed investment decisions and portfolio optimization in order to achieve long-term financial stability.

7. Completing the Financial Puzzle

Users are presented with task lists representing financial activities to be completed, such as budgeting, bill payments, or savings contributions. Clearing these tasks provides users with a sense of accomplishment and progress towards their financial objectives. 

This mechanic serves users by offering a structured and rewarding approach to financial management, contrasting with the perceived complexity and tedium often associated with traditional financial systems. Who does not want to feel a sense of accomplishment by finding that missing piece of a puzzle?

What to consider?

Trust and Security: In order to maintain customer trust while employing gamification, the assurance of suitable data security and the strong protection of consumer privacy are essential. Gamification efforts clearly need to comply with any and all applicable standards, as well as prevailing best practices in the domain of interest. In some cases, infosec tools such as Blockchain secure ledger architecture (public or private) can be employed to ensure trust, auditability and traceable accountability within the apps and operating platforms involved. There are notable precedents of gamified systems which benefit from this approach already in large scale use beyond the familiar digital currencies, including loyalty and peer-to-peer payment platforms.

API Integration to Accelerate Gamification: Integrating gamified features into existing financial platforms through APIs enables seamless user experiences across multiple channels. Whether it is a banking app, investment platform, or personal finance management tool, API integration ensures a cohesive and engaging user journey. The use of API-based interactions to introduce gamification can also facilitate overlaying gamification methods on top of legacy operations, without risking these ‘Systems of Record’ or their underlying data repositories, while at the same time, creating dynamic possibilities for innovative new consumer interactions with said systems well beyond what their original creators could have ever envisioned. The Financial Services market contains a deep, and aging, proliferation of such systems and the introduction of gamification on this independent new layer of abstraction from legacy architectures can empower bold new digital marketing and consumer engagement techniques to be applied, without the need for dramatic (and hyper-costly) legacy retooling at some fundamental level.  

Data and Data Analytics: Data Analytics tools can be leveraged to gain deep insights into user behavior, preferences, and spending patterns – make sure to reuse this data to offer tailored recommendations, incentives, and challenges to users.

On-The-Fly Functionality: With the ubiquitous presence of smartphones, mobile apps, wearables and location-based app awareness can all serve the purposes of immediacy and fine-grain relevance for effective gamification in Financial Services. Features like progress tracking, personalized recommendations, and real-time notifications enhance user engagement and facilitate seamless interaction with financial products and services which may otherwise be ‘trapped’ deep within legacy systems that operate far below the surface of the consumer’s daily life experiences.. 

When developing gamification features, you need to carefully consider which functionalities are required in order to provide an added value for your user base. For example: 

1. VR and AR technologies offer immersive experiences that simulate financial scenarios, such as investment simulations or budgeting challenges. 

2. AI-powered chatbots and virtual assistants provide users with personalized financial advice, answer queries, and deliver interactive experiences through natural language interfaces. And, if your user is still not getting the service they need, the chatbot can automatically forward the query to a customer service representative. 

3. Progress bars, leaderboards, graphs and quizzes, points and rewards – yes-yes, various game design elements and characteristics need to be included to increase customers’ motivation to use the financial services app. 

Design: It’s essential to ensure that the interface is comfortable and friendly, even for non-socializers who can be discouraged by socially active people easily achieving their goals . There is a high risk that the implemented design will focus only on the needs of existing users’ needs, so a thorough research based on User Personas, Feedback Mechanisms, Iterative Design Process and an easy User Onboarding is essential for driving better engagement and satisfaction across all user segments.

Investment: Developing and implementing gamification into a business model is a costly endeavor that has to be carefully considered and planned. However, entering into a strategic technology partnership will help to unlock a power of complementary capabilities to create synergies and open up new markets or client segments, and reduce risks.

Build a Gamified User Experience with Tech-Azur

Unlocking the potential of gamification in financial services entails strategic implementation for optimal results. By leveraging Tech-Azur's innovative technology solutions, your firm can effectively integrate game mechanics to achieve objectives in the financial realm. Our collaborative process involves identifying legitimate applications of gamification tailored to meet your business goals.

The formula for success lies in creating immersive, personalized, and rewarding experiences. These experiences empower users to make informed financial decisions, achieve their goals, and ultimately unlock financial success. However, it must be implemented effectively, as merely gamifying the user experience isn't sufficient; it's essential to gamify actions that promote healthy and beneficial habits.

With Tech-Azur's creative technology approach, we can generate the desired outcomes by strategically utilizing effective gamification methods. Together, we can transform the future of finance into a more engaging, inclusive, and empowering landscape. Contact Tech-Azur today, if you're ready to explore the unique possibilities of gamified fintech solutions.