Entertaining gaming and the sober financial world: Two industries with innovative intersections. Computer games and gaming apps have so far mainly served to pass the time and escape from reality, while investing and banking have been a factual matter. This contrast seems to be dissolving more and more in the course of advancing digitization: Fintech companies and neobrokers have discovered the potential of “gamification” for the financial industry.
Gamification is a trend-setting trend that translates the principles and mechanisms of computer games into a different context, for instance, transfers to the economic one.
Of course, this idea is not new. Playful reward systems have been used in school lessons for decades to motivate children. Discount brand or frequent flier programs also use point-based systems with hierarchical levels for customer loyalty. Companies have long recognized that they can use gamification methods to promote innovative processes by increasing the engagement of customers or employees through incentives.
Recently, gamified broker, investment and financial management apps have been finding their way into the financial industry.
Two worlds, three goals: financial education, usability and customer loyalty
Traditional banks have been facing numerous challenges against their own for years. The ongoing low or Zero interest rate environment threatens their core business. At the same time, the rapidly advancing digitization plays into the hands of the emerging fintech competition. The declared goal of fintechs is to revolutionize the financial industry with transparent, cost-effective, user-friendly technologies and apps. Digital financial products displace traditional banking services by offering customers a service adapted to individual customer requirements, always available and accessible at the best conditions, despite standardization.Here is more about FinTech development.
Central to this are intuitively designed banking or investment apps, some of which have playful features, such as personal avatars, trophies for achieved goals or sound effects. The consequence of this increasing digitization and gamification is nothing less than a change in the image of the banking industry: investing is no longer boring and plain, but fun and has become part of the consumer world.
Gamification primarily pursues three goals in the banking world: financial education, usability and customer loyalty. A bank customer does not want to play pastime. Rather, an optimized user experience, accessibility and transparency are in the foreground for him. (coachmantahoe.com) Each gamification element must therefore be associated with direct added value for the customer. The playful incentive should only be a means to an end to help customers achieve a desired goal or to make complex or confusing banking products more customer-friendly and understandable.
Gamification in finance sector essentially has the following objectives:
- Promotion of austerity through personal goals
This includes short-term savings, but also medium-term to long-term investments and pension planning.
- Improvement of daily financial management
Customers can easily track, categorize expenses and monitor their own budget plan.
- Teaching financial competence
Apps explain complex financial terms such as inflation, liquidity management or investment strategies through films, simulations or games.
- Customer loyalty and development of new target groups
Gamification enables financial service providers to position themselves as innovative, customer-oriented and cost-effective players in the market and to attract customers to traditional financial institutions. For example, lean structures and lower management salaries lead to minimal fixed costs. As a result, fintechs can charge their customers particularly low fees – or even offer banking services free of charge.
- Promoting the idea of community
Financial apps promote the exchange between customers and their own company in internal forums or chat groups.