Traditionally, banks provided their customers with personalised and engaged one-on-one interactions through their branch networks. Changes in technology shifted this paradigm, as banks used new technology to offer a greater number of services through a greater number of channels, eventually leading to services becoming transactional rather than personal and engaging. With changes in the competitive landscape – both in the form of fintech firms who are ‘cherry picking’ profitable parts of a bank’s value chain, and in challenger banks offering alternatives never before provided to customers, banks are pursuing initiatives and strategies that seek to secure greater levels of intimacy, engagement and loyalty from their customers.
Gamification is becoming increasingly pervasive in the financial sector as an initiative which can secure the greater levels of interaction and engagement sought. In the last few years we have seen successful examples of how some organisations have created systems that motivate their target users to achieve these business objectives.
What is gamification?
Gamification is the introduction of gaming principles and design into non-gaming environments. The term is new but the concept is not. There are already examples of its existence in the financial services industry – loyalty rewards associated with spending habits for example, and across different functions – sales reporting and leaderboards creating competition, but regarding this as a strategic framework for growth has been given little consideration, and does not come without its challenges.
What are the challenges to using gamification?
As a standalone concept gamification doesn’t achieve a lot. It needs to be integrated with overall business strategy, tied to specific objectives, and produce measurable output data – particularly across digital and mobile strategies because they are inter-related. Applying gamification, and the understanding of customer and staff data that this provides, in conjunction with the high volume of information offered by Big Data from multiple sources could prove to be a very powerful tool for banks.
So far though, banks haven’t really endeavoured to encourage customers or their staff to use such services, but the potential to create an engaging tool which eases the management and movement of money or drive internal productivity measures is there. Many non-gaming industries such as healthcare, utilities and insurance have embraced gamification and achieved their objectives both in terms of making their apps popular like Samsung Nation and by enhancing their reputation as a health provider like Bupa Boost. Financial services firms would do well to take note.
There are further technology and regulatory challenges to be considered. How will gamification sit alongside existing digital banking environments and integrate into wider technology infrastructure? How do banks balance driving the right behaviours, both internally and externally, whilst ensuring that the data they are gathering is being used to better serve the customer and not providing any significant data privacy challenges?
Overcoming these challenges will allow banks to think outside of their traditional definition of systems and leverage the true value of gamification – they will be enabling participation and engagement and creating experiences for people by evoking emotion that they can then use as part of a strategy that is built around achieving greater levels of customer intimacy, engagement, and loyalty.
Oriol Villalante, Senior Consultant, Axis Corporate