Gamification is proving its effectiveness as a powerful learning and engagement tool in today’s digital landscape. It is already utilized globally in education and training, but its potential extends beyond these fields. While customer engagement benefits are evident, the question remains: Can gamification revolutionize the fintech industry? This blog will help you find the answer to that.
What is gamification in the realm of fintech and banking?
Gamification offers a unique solution to banks, financial institutions, and the insurance (BFSI) sector, transforming financial management into a fun and engaging experience. It refers to the assimilation of gaming elements into a non-game platform.
Using the principles of psychology, gamification thrives on three foundational elements: objectives, rewards, and competition. You present your customers with a goal, encourage them to achieve it, and then reward them for the achievement.
By leveraging the power of gamification, fintech, and non-fintech companies can differentiate themselves and build lasting customer relationships. In fact, several fintech startups have already begun implementing this technology in their embedded finance products, services, and even everyday operations.
According to a report on gamification by Mordor Intelligence, Extracto, a bank in Texas, tested gamification to educate clients about their ongoing offers and the associated benefits. As a result, the conversion rate rose from 2% to 14% and raised customer acquisitions by 700%.
Types of gamification BFSIs can explore
Points and badges
Awarding points for completing financial tasks, such as saving a certain amount of money or investing in avenues offering greater returns, can motivate customers to engage with their finances more actively. Badges can be earned for achieving specific financial goals or milestones, adding an element of achievement and recognition.
Leaderboards
Leaderboards can encourage healthy competition, motivating them to improve their financial management habits. Leaderboards can be based on various metrics, such as total savings, investment performance, or credit score improvement.
Challenges and quests
Setting financial challenges and quests can add a sense of fun and adventure to managing finances. Challenges can be individual or team-based and can involve achieving specific goals within a set timeframe.
Levels and progression
Implementing a system of levels and progression can motivate customers to improve their financial literacy and behavior continuously. As customers reach higher levels, they can unlock new features, rewards, or benefits.
Virtual rewards
Offering virtual rewards, such as in-game currency or exclusive content, can incentivize customers to participate in gamified activities. These virtual rewards can then be redeemed for real-world rewards, such as discounts or cashback offers.
Social elements
Adding social elements to gamification can increase engagement. Customers can share their achievements, compete with peers, and collaborate to achieve common goals.
Personalized experiences
Gamification can be personalized to meet the individual needs and preferences of each customer. This can involve tailoring challenges and rewards to specific financial goals and interests.
What benefits does fintech gamification offer for BFSIs and customers?
Gamification in fintech not only reaps rewards for BFSIs but benefits individuals as well.
Benefits for BFSIs:
Improvement in customer satisfaction
Gamified fintech app features like challenges and quests make financial activities more engaging and interactive, leading to higher user retention and improved brand loyalty.
Enhanced customer acquisition and retention
Gamified campaigns can attract new customers by offering engaging and interactive experiences tailored to their needs and interests. Gamified features like rewards for referrals can encourage existing customers to promote the bank to their networks, expanding the customer base organically.
Reduced customer attrition
By providing a more engaging and rewarding experience, gamification can motivate customers to stay with the bank and reduce churn rates.
Availability of customer insights
Gamification generates valuable data about user behavior and preferences, enabling banks to personalize offers, optimize services, and improve overall efficiency.
Benefits for Individuals
Improved financial literacy
Demo videos and other games can help explain complex financial concepts to individuals and boost their financial literacy, such as budgeting, investing, and credit, along with new concepts such as cryptocurrency and alternative financing offered by Web 3.0.
Improved financial health
Users can monitor their finances and receive rewards for small victories, like saving money or paying off a credit card debt. This way, in-app gamification helps users achieve their financial goals faster and more healthily.
Encourages savings
By letting users choose to cap each transaction and send the difference to a savings account or by creating savings goals in the app, you can help users save money and reward them for achieving their savings goals.
Summing it up: Key considerations for BFSIs implementing gamification
While gamification is an excellent tool for boosting user engagement and loyalty for your FinTech apps, it is only beneficial if the game mechanics are implemented accurately. As such, for BFSIs interested in building a fintech app with gamification features or enhancing their existing one, they must partner with a vetted technology services provider with ample expertise in the financial services domain.