Traditionally, banks provided their customers with personalized and engaged one-on-one interactions through their branch networks. Changes in technology and consumer expectations has shifted this paradigm, as banks now use 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 that have traditionally not been provided to customers in the past, 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. In the last few years we have seen successful examples of how some organizations have created systems that motivate their target users to achieve these business objectives.
What is Gamification?
Gamification is the game-design and game principles in non-game contexts. As Brett King said, “banking is no longer somewhere you go but something you do”. In the past years, we’ve seen how the banking industry has made a significant shift from financial services as a service to financial services as experiences.
There are many examples of gamification being applied in financial services– loyalty rewards associated with spending habits for example, and across different functions – sales reporting and leader boards 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 of Gamification?
Gamification as a standalone concept doesn’t achieve a lot. It needs to be integrated with the overall business strategy, tied to specific objectives, and produce measurable output data – particularly across digital and mobile strategies because they are interrelated. Applying gamification, and the understanding of customer and staff data, 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, banks haven’t really encouraged customers or their staff to use such services enough, 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 behaviors, 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 is a Senior Consultant at Axis Corporate.
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