Gamification has received a great deal of attention from industry experts and analyst firms recently, especially within the last year. For example, Deloitte Consulting described “gamification... [as a] top 10 technology trend.” Additionally, Gartner has predicted that “by 2014, more than 70 percent of Global 2000 organizations will have at least one ‘gamified’ application.” The analyst firm also noted, “While the current success of gamification is largely driven by novelty and hype, gamification is positioned to become a highly significant trend over the next five years.” It is clear that gamification is quickly gaining popularity amongst the finance industry and innovative early adopters are embracing the concept to enhance and differentiate their offerings to the market.
At a time when digital channels’ propositions are running the risk of becoming commoditised, the capacity to differentiate and enhance the user experience is paramount. The sentiment within the industry is that gamification enables banks to further engage with users based on the unique and insightful data collected, which can help to solve business challenges.
[For More on Gamification in Banking: 5 Banks Leading the Way in Gamification]
So has gamification found critical mass in retail banking yet? Well, not quite – but the signs look very encouraging. Over the last few years, there have been a number of high profile gamification projects across a broad spectrum of business objectives. Majority of these projects have proven successful and demonstrated longevity in an extremely competitive marketplace.
One of the most successful areas for gamification has been in marketing. Back in 2009, Barclaycard’s Waterslide Extreme application in the UK delivered three million downloads in 13 days. What is interesting is how the trend has evolved since this early success. Gamification has moved beyond marketing. Amongst other things, banks have realized that gamification offers them the opportunity educate customers.
Extraco Bank is an early example of a bank which scored success with educational gamification. When this U.S. bank wanted to remove free checking accounts in 2011, it used an online gamified application to explain the new proposition to customers. To address customer concerns and increase retention rates, the game walked customers through the key reasons and benefits of the account changes. As a result, conversion rates jumped from 2% to 14%1 on the platform.
Banks can also leverage gamification as an effective tool to change customer behavior. An interesting example of such behavioral gamification came from Spanish bank BBVA. BBVA launched ‘BBVA Game’ in 2013, a customer rewards application aimed to increase engagement with the internet bank. Customers earn points by using e-banking, which can be redeemed for gifts (direct-download music, football tickets etc) or for prize draws. The initiative proved very successful, attracting over 100,000 registered users in its first six months. As a result, the bank encouraged customers to use their online services more regularly, building a stronger relationship with online banking. For BBVA, the byproduct is increased transactional activity migration and stronger brand loyalty.
However, the most significant opportunity offered by gamification is through enabling banks and customers to better understand their product needs. This is where gamification will directly drive sales opportunities and revenue for banks. A number of financial institutions have started to innovate in this space. For example, American Family Insurance launched its iAmFam application in 2010, with its most recent update announced on March 14, 2014. The application provides a game, very similar to The Sims, where customers learn about the important of insurance. Users’ virtual characters suffer from real life insurance issues – fires, theft etc. By giving customers practical scenarios, it encourages them to think about where they may have gaps in their insurance coverage. This gives leads to the identification of potential product needs – and then to sales.
Bulgarian bank DSK Bank launched a gamified saving process, DSK Gameo, in December 2013 with the help of Misys. This application is particularly interesting as it represents the next level of evolution in financial services gamification, incorporating several different aspects of gamification. It provides a marketing application which can be used to attract new customers. It deploys behavioural gamification aimed to change customers’ savings habits by awarding points for regular transfers. There are quiz challenges that educate customers on products. Customer goal setting enables the bank to better understand its customers’ product needs. By combining these elements, DSK Bank’s application can build meaningful, long-term relationships with its customer base – and deliver clearly defined financial targets.
We believe this is a key indication of the future evolution of gamification. Gamification is becoming increasingly pervasive in the financial services sector as banks are increasingly adopting this tool to better service and engage with customers. As more organizations realize that gamification is neither a fad nor a frivolity, new firms will look to add gamification to their existing processes. Gamification will continue to evolve from strictly a marketing and educational tool as new industries adopt this powerful solution, differentiate themselves through deploying new and innovative applications in both the front and back office.
Alex Bray is the retail channels director, banking, for Misys.