Through the gamification of financial services many fintech firms see a profitable strategy to acquire customers.
What do budgeting for the month, saving for a housing deposit and putting money aside for retirement all have in common?
These are all undeniably important tasks – but are usually completed with little enjoyment, if completed at all.
On the flip side, popular video games, like PokemonGo or Fortnite, and their hundreds of millions of players worldwide, show the extent to which the gaming and entertainment industries have succeeded in capturing the hearts and minds of young people and millennials across the globe.
It is therefore unsurprising that other sectors have looked to use gamification in an attempt to emulate those results and appeal to today’s consumers – hooked on digital technology to manage their everyday lives.
At the heart of this growing trend is the fact gamification has the capacity to make what can be considered the most mundane tasks emotionally engaging, and at times even exciting. For financial services firms, this could be a significant opportunity for improving customer experiences and driving behavioural change in instances where apathy so often rules.
Fintechs adopt gamification techniques
Emerging FinTech players have been some of the early adopters of gamification – applying these techniques to personal finance offerings, and they have succeeded in attracting a growing customer-base of young people as a result.
One example is apps that have emerged to help children manage their pocket money, such as Rooster Money – instilling financial education and positive money habits in children and pre-teens. Similarly, Monzo has developed ‘pots’ where you can put aside a fixed sum of money for particular goals, as well as tracking your spending against specified targets.
These developments are particularly valuable as, according to the Money Advice Service, people’s attitudes towards saving are formed at age seven – reaffirming the importance of shaping them while future consumers are still young.
Those in the fintech space at the helm of the gamification trend are also often the most effective at communicating how they are harnessing the power of technology, data and psychology to improve young people’s financial futures. And businesses that communicate their commitment to upskilling young people on money matters would, no doubt, benefit from a brand-image boost to match.
However, it is important to consider that gamification has its drawbacks too, and that there are reputational risks that firms should be mindful of. Just last week, it was reported that the NHS is set to launch its first internet addiction clinic – a centre dedicated to young people and adults addicted to the internet, which will initially be focusing on video gaming disorders.
This follows on from the recent news that the World Health Organisation internationally classified gaming disorders as ‘addictive behaviour’. So, as gaming and internet addiction is recognised as a global health issue, it is imperative that financial services firms navigate these waters carefully to ensure that they harness the good while mitigating the bad.
Using cutting-edge technology and the latest gaming apps to improve customer experience and engage young people on money management will be viewed favourably. But using technology for the sake of technology could run the risk of perpetuating young people’s addiction to the internet and gaming – or, at the very least, the perception of it.
A smart move would be for financial services players to present themselves as being at the forefront of ‘responsibly’ using gamification to reach a wider pool of consumers with a better service.
The power of gamification
Ultimately, the verdict is out: whether you are for or against video games like PokemonGo or Fortnite – financial services companies should take note.
Harnessing the innovative technology in gaming and the psychology sitting behind have the potential to be valuable tools for appealing to tomorrow’s customers.
The sheer popularity of gaming among young people across the world is testament to its power to captivate hearts and minds. Whilst financial services may never go quite as far as that, the adoption of gamification methods could be a significant force for greater engagement and positive change in both behaviour and industry perception.
In a few years’ time you may ask yourself the same question: what do budgeting for the month, saving for a housing deposit and putting money aside for retirement all have in common?
Through the gamification of financial services, you might just find yourself enjoying these once-mundane tasks – or at the very least, completing them properly in the first place.
Now in its sixth year, the AltFi London Summit returns on 18th March 2019 to 155 Bishopsgate. Last year proved to be a crucial turning point for the key players building the future of finance. Leading platforms launched oversubscribed IPOs, digital banks proliferated and mainstream financial institutions started their own disruptive propositions. With 2019 certain to be another landmark year, more questions will be asked by regulators with investor interest in disruption also poised for more rapid growth.